When one country can produce a product at a lower cost in terms of other goods, that country is said to have
A) an absolute advantage.
B) a comparative advantage.
C) a productive advantage.
D) an unfair advantage.

Question

Quizplus · Accepted Answer

A comparative advantage exists when a country can produce a good at a lower opportunity cost compared to other goods, relative to other countries. This concept is key in international trade theory, suggesting that even if one country has an absolute advantage in producing all goods, there can still be benefits from trade if countries specialize based on their comparative advantages.

When One Country Can Produce a Product at a Lower