Which of the following best describes the principle of comparative advantage?
A) Some people can produce the same good better than other producers can.
B) Someone has the ability to produce the same good using fewer inputs than another producer.
C) Someone has the ability to produce the same good for the lowest opportunity cost.
D) To produce more of one good, people have to produce less of another good.

Question

Quizplus · Accepted Answer

The principle of comparative advantage states that a person or country should specialize in producing the good or service for which they have the lowest opportunity cost, meaning they can produce it at the lowest cost compared to others. This allows for mutually beneficial trade between individuals or countries who each have a comparative advantage in producing different goods or services. Choice A refers to absolute advantage, while choice B is the concept of efficiency. Choice D refers to the concept of trade-offs.

Which of the Following Best Describes the Principle of Comparative