If Brazil has a comparative advantage in the production of coffee compared to the United States, then
A) Brazil also has an absolute advantage in the production of coffee.
B) the United States has an absolute advantage in the production of coffee.
C) Brazil can produce coffee at a lower opportunity cost than the United States.
D) the United States cannot produce coffee.

Question

Quizplus · Accepted Answer

Comparative advantage occurs when a country can produce a good at a lower opportunity cost than another country. It does not necessarily mean that the country has an absolute advantage (being able to produce more of a good with the same resources) or that the other country cannot produce the good at all.

If Brazil Has a Comparative Advantage in the Production of Coffee