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

Question

Quizplus · Accepted Answer

Comparative advantage refers to the ability of a country to 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 Mexico Has a Comparative Advantage in the Production of Oil