Suppose a producer can produce shirts with lower opportunity cost than jeans. What else do we need to know if we want to determine this producer's comparative advantage?
A) how this producer's opportunity cost compares with other producer's opportunity cost
B) nothing, the producer has a comparative advantage in jeans.
C) how many hours of work each product requires
D) nothing, the producer has a comparative advantage in shirts

Question

Quizplus · Accepted Answer

In order to determine the producer's comparative advantage, we need to compare their opportunity cost with other producers in the market. Therefore, we need to know how this producer's opportunity cost compares with other producers' opportunity costs.

Suppose a Producer Can Produce Shirts with Lower Opportunity Cost