When one producer has a comparative advantage in production,he or she
A) can produce more output than someone else using the same quantity of resources.
B) can produce a good at a lower opportunity cost than someone else.
C) does not benefit from trade with other producers.
D) is unable to reach his or her production possibilities frontier (PPF).
E) trades only with others who have the same comparative advantage.

Question

Quizplus · Accepted Answer

When a producer has a comparative advantage in production, it means that they are able to produce a good at a lower opportunity cost than someone else. This means that the producer can produce the good at a lower cost, in terms of what they have to give up to produce it, than another producer who does not have a comparative advantage in that good. Therefore, the producer with the comparative advantage will benefit from trade with other producers who do not have a comparative advantage, as they will be able to produce the good at a lower cost and trade it with others for goods they cannot produce as efficiently.

When One Producer Has a Comparative Advantage in Production,he or She