Comparative advantage is
A)the ability of an individual to specialize and produce a greater amount of some good than can another individual
B)the number of units of one good given up in order to acquire something
C)the ability of an individual to produce a good at a lower opportunity cost than some other individual can
D)an expression for the amount of labor a particular individual needs to produce a fixed amount of capital goods
E)a reference to an individual having the greatest opportunity cost of producing the good and produces it with the fewest resources

Question

Quizplus · Accepted Answer

Comparative advantage refers to the ability of an individual or a country to produce a good at a lower opportunity cost than another individual or country. This means that they can produce the good at a lower cost in terms of other goods that they could have produced instead. It is different from absolute advantage, which simply refers to the ability of an individual or country to produce more of a good than another individual or country. Option A refers to absolute advantage, while options B, D, and E do not accurately define comparative advantage.

Comparative Advantage Is