domestically low efficiently desire from other import Third, one nation can sell some items at a (1) cost than other countries. Japan has been able to export large quantities of radios and television sets because it can produce them more (2) than other countries. It is cheaper for the United States to buy these from Japan than to produce them (3) . According to economic theory, Japan should produce and export those items (4) which it derives a comparative advantage. It should also buy and (5) what it needs from those countries that have a comparative advantage in the (6) items. Finally, foreign trade takes place because of innovation or style. Even though the United States produces more automobiles than any (7) country, it still imports large numbers of autos from Germany, Japan and Sweden, because there is a market for them in the United States.