The law of comparative advantage says that a person should produce a good if he or she:
A)has the greatest desire to consume that good.
B)has the lowest opportunity cost of producing that good.
C)has an absolute advantage in a related activity.
D)has a comparative advantage in a related activity.
E)is equally good at producing this good as someone else is.

Question

Quizplus · Accepted Answer

The law of comparative advantage states that a person should specialize in producing a good or service if they have the lowest opportunity cost of producing it. In other words, if they give up fewer resources to produce a good than someone else, they have a comparative advantage in producing that good. Therefore, option B is the correct answer.

The Law of Comparative Advantage Says That a Person Should