A country is said to have _____________________ when it can produce a product at a smaller opportunity cost.

Question

Quizplus · Accepted Answer

Comparative advantage refers to a country's ability to produce a good or service at a lower opportunity cost than another country. This means that the country can produce a good at a lower cost in terms of other goods that it would have to give up producing in order to produce that good. This allows the country to specialize in producing the good in which it has a comparative advantage and trade with other countries for goods in which they have a comparative advantage, leading to overall gains from trade for both countries.

A Country Is Said to Have _____________________ When It Can