When one person's opportunity cost of producing a good is lower than another person's opportunity cost of producing the same good, it is called
A) a comparative advantage.
B) a tradeoff.
C) specialisation.
D) an absolute advantage.
E) production possibilities.

Question

Quizplus · Accepted Answer

This situation is described as comparative advantage, where one person has a lower opportunity cost in producing a good compared to another person. This creates an opportunity for both individuals to specialize in the goods they have a comparative advantage in and trade with one another, resulting in a more efficient allocation of resources and higher overall output.

When One Person's Opportunity Cost of Producing a Good Is