When a nation has a comparative advantage in the production of a particular good,
A) the opportunity cost of producing that good is higher than that of other goods.
B) the nation can gain from trade.
C) the comparative advantage encourages self- sufficiency.
D) the nation tends to avoid specialization.

Question

Quizplus · Accepted Answer

When a nation has a comparative advantage in the production of a particular good, it means that they can produce that good more efficiently (and with lower opportunity cost) than other nations. This allows them to specialize in the production of that good and trade with other nations for goods they are less efficient at producing. This leads to gains from trade for both parties involved.

When a Nation Has a Comparative Advantage in the Production