The concept of comparative advantage is based on:
A)absolute labor productivity.
B)relative labor costs.
C)dollar prices of labor.
D)relative opportunity costs.

Question

Quizplus · Accepted Answer

Comparative advantage is based on the concept of relative opportunity costs, which means that countries should produce and export goods that they can produce at a lower opportunity cost compared to other countries. It is not solely based on absolute labor productivity or dollar prices of labor. Relative labor costs may be a factor in determining opportunity cost, but it is not the sole basis of comparative advantage.

The Concept of Comparative Advantage Is Based On