Case Interview Prep

Answer: C - In the Ricardian model of international trade, countries specialize in their best productions.

Key Takeaway: The Ricardian model of international trade is concerned with the concept of ‘competitive advantage’. This means that countries specialize in producing what they produce best. For example, Germans specialize in producing long-lasting, highly efficient vehicles. The Japanese are known to specialize in high-quality electronics. Egypt is known for producing high-quality cotton. These countries follow their competitive advantage which allows them to specialize and have a strong presence in the world market.