Countries will export goods and services they can produce at lower opportunity cost. This is called ____ .

The concept of exporting goods and services that a country can produce at a lower opportunity cost is known as comparative advantage. When a country has a comparative advantage in producing certain goods, it means that it can produce those goods more efficiently relative to other products when considering the alternative goods that could be produced instead. This principle encourages countries to specialize in the production of goods where they have the lower opportunity cost, which can lead to more efficient resource allocation and increased overall economic welfare when trading with other countries.

For instance, if Country A can produce wine more efficiently than cloth compared to Country B, while Country B is more efficient at producing cloth than wine, both countries can benefit from specializing and trading based on their comparative advantages. This leads to a greater variety of goods available to consumers and can enhance economic growth.

The other concepts, while relevant to trade and economics, do not specifically address the principle of producing goods at a lower opportunity cost. Absolute advantage, for example, refers to the ability of a country to produce more of a good with the same resources than another country, rather than considering opportunity cost. Trade surplus indicates a situation where a country exports more than it imports and is a result rather than a principle guiding production and trade. Economic efficiency relates to the optimal