Comparative advantage in production is achieved by
A)Subsidizing,specializing,and lowering the price of an exported good.
B)Being able to produce a good with fewer inputs than in other countries.
C)Having terms of trade that are better than the terms of trade faced in other countries.
D)Having a lower opportunity cost of producing a good relative to that of other countries.

Question

Quizplus · Accepted Answer

Comparative advantage is achieved when a country can produce a good at a lower opportunity cost than other countries. This means that a country can produce one good at a lower cost (in terms of foregone production of other goods) than another country, and vice versa. By specializing in producing the good that has a lower opportunity cost, a country can produce more of both goods and trade with other countries to achieve mutual benefits. Therefore, choice D (having a lower opportunity cost of producing a good relative to that of other countries) is the best answer that explains comparative advantage.

Comparative Advantage in Production Is Achieved by