According to the Theory of Comparative Advantage, which of the following reasons justifies a country to export a product?

The Theory of Comparative Advantage, developed by David Ricardo, posits that a country should specialize in and export goods for which it has the lowest opportunity cost of production, even if it does not have an absolute advantage. Opportunity cost is the cost of producing one good in terms of the other goods that must be given up. Therefore, a country gains from trade by exporting products where its cost of production, relative to other goods it could produce, is lower than in other countries. This relative efficiency is the core of the theory, not absolute productivity or lower labor input.

A. Producing a product with less labor describes Absolute Advantage, a different economic theory proposed by Adam Smith, not Comparative Advantage.
B. A lower wage rate is a component of cost but does not, by itself, determine comparative advantage, which is based on relative productivity and opportunity cost.
C. Higher productivity in producing a good also describes Absolute Advantage, not the relative opportunity cost central to the Theory of Comparative Advantage.

1. Krugman, P. R., Obstfeld, M., & Melitz, M. J. (2018). International Economics: Theory and Policy (11th ed.). Pearson. Chapter 3: The Ricardian Model of Trade. (Explains that comparative advantage depends on differences in labor productivity relative to other goods, i.e., opportunity cost).

2. APICS CLTD Learning System, Module 1, Section C, Chapter 1: Global Supply Chain. (Distinguishes between the theories of absolute advantage and comparative advantage, highlighting opportunity cost as the basis for the latter).

3. MIT OpenCourseWare. 14.01 Principles of Microeconomics, Fall 2018. Lecture 2: Comparative Advantage. (Provides a foundational explanation of comparative advantage based on opportunity cost). Available at: https://ocw.mit.edu/courses/14-01-principles-of-microeconomics-fall-2018/