The law of comparative advantage states that the person who should produce a good is the person who
A)has the lowest opportunity cost of producing that good
B)can produce that good using the fewest resources
C)will produce that good using the most expensive resources
D)has the most desire for that good
E)has produced that good in the past

Question

Quizplus · Accepted Answer

The law of comparative advantage states that the person who should produce a good is the person who has the lowest opportunity cost of producing that good. Opportunity cost is the cost of giving up one alternative for another. Therefore, the person who can produce a good with the lowest cost, in terms of what they have to give up in order to produce it, should produce it.

The Law of Comparative Advantage States That the Person Who