Comparative advantage is based on opportunity costs.

Name: Comparative advantage is based on opportunity costs.
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Question

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Comparative advantage refers to the ability of a country to produce a good or service at a lower opportunity cost than another country. In other words, a country should specialize in producing the good or service in which it has a lower opportunity cost and trade with other countries in order to increase overall welfare. Therefore, comparative advantage is based on opportunity costs.

Comparative Advantage Is Based on Opportunity Costs