According to the law of comparative advantage, what should be the distinguishing characteristics of the goods a nation imports?
(a) they have the lowest capital costs.
(b) they can be domestically produced cheaply.
(c) they cannot be domestically produced cheaply.
(d) they have the greatest domestic demand.

The correct answer is option C.

Explanation:

The law of comparative advantage states that a country will produce and export the commodity it has a comparative advantage in producing.  

In other words, if the country can produce good cheaply or at a lower opportunity cost.  

The good that cannot be produced cheaply or has a higher opportunity cost will be imported from the country that produces it cheaply.

C) They cant be domestically produced cheaply.

Explanation:

If a good or service can be obtained more economically through trade, it makes sense to get it that way rather than by producing it for yourself. In other words, if someone else is willing to supply you with a good at a lower cost than that at which you can produce it yourself, it makes sense to obtain it through trade and channel your own resources to the things you can produce most efficiently. See section: Gains from specialization and division of labor.

answer; encouraging the development of innovations by firms attempting to break a monopoly; (creative destruction)

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