Which of the following scenarios best demonstrates the concept of comparative advantage as explained by David Ricardo?
1
A country that produces both electronics and automobiles at the lowest cost dominates the global market.
2
A country specializing in textile production because it can produce textiles at a lower opportunity cost than agricultural products, even though another country produces textiles more efficiently overall.
3
A country increases tariffs on imports to protect domestic industries and retain market advantage.
4
A country exports all of its natural resources to capitalize on foreign demand, regardless of opportunity costs in domestic production.