Country A has a comparative advantage compared to Country B in the production of shoes if
A) Country A can produce shoes at a lower monetary cost than Country B can.
B) Country A can produce shoes using fewer resources than Country B can.
C) the demand for shoes is higher in Country A than in Country B.
D) Country A can produce shoes at a lower cost in terms of other goods than Country B can.

Question

Quizplus · Accepted Answer

Comparative advantage is determined by the opportunity cost of producing goods. Country A has a comparative advantage if it can produce shoes at a lower opportunity cost, meaning it sacrifices less of other goods compared to Country B.

Country a Has a Comparative Advantage Compared to Country B