-A nation has a comparative advantage in a good when it has a
A) tariff in place protecting the producers of the good.
B) lower opportunity cost of producing the good.
C) higher absolute cost of producing the good.
D) lower absolute cost of producing the good.
E) higher opportunity cost of producing the good.

Question

-A nation has a comparative advantage in a good when it has a
A) tariff in place protecting the producers of the good. 
B) lower opportunity cost of producing the good. 
C) higher absolute cost of producing the good. 
D) lower absolute cost of producing the good. 
E) higher opportunity cost of producing the good.

Quizplus · Accepted Answer

A nation has a comparative advantage in producing a good when it has a lower opportunity cost of producing that good compared to other nations. This concept is key in international trade theory, suggesting that countries should specialize in producing goods for which they have the lowest opportunity cost, thereby maximizing efficiency and gains from trade.

-A Nation Has a Comparative Advantage in a Good When