What does the principle of comparative advantage suggest?

The principle of comparative advantage suggests that countries should specialize in producing goods for which they have the lowest opportunity cost, meaning they can produce these goods more efficiently than others. This specialization allows countries to maximize their production efficiency and gain economic benefits from trade.

When countries focus on their strengths and produce goods that they are relatively better at producing compared to other nations, they can trade with each other to obtain goods that they are less efficient in producing. This not only leads to an increase in overall production but also allows for a greater quantity and variety of goods available for consumption. This principle is foundational in international trade theory and illustrates how countries can benefit from engaging in trade even if one country is not the absolute best at producing any one good.

By contrast, the other choices suggest approaches that lack the efficiency benefits highlighted by comparative advantage. For instance, producing all goods equally ignores the potential for specialization and efficiency. Similarly, focusing solely on technology doesn't necessarily guarantee that a country will have a comparative advantage in all goods. Lastly, importing all goods that a country cannot produce overlooks the potential gains from specializing in areas where a country may have competitive advantages.