A country possesses a comparative advantage in the production of a good if
A)it possesses an absolute advantage in the production of this good.
B)it is able to produce more of this good per hour than any other country.
C)the opportunity cost in terms of forgone output of alternative goods is lower for this country than it is for its trading partners.
D)All of the above.

Question

Quizplus · Accepted Answer

A country has a comparative advantage in producing a good if it can produce it at a lower opportunity cost compared to other countries, not necessarily because it can produce more or has an absolute advantage.

A Country Possesses a Comparative Advantage in the Production of a Good