A country has a comparative advantage in producing a good when it produces that good:
A) at a lower opportunity cost than another country.
B) at a higher opportunity cost than another country.
C) in greater quantity than another country.
D) with fewer inputs than another country.

Question

Quizplus · Accepted Answer

A country has a comparative advantage in producing a good when it can produce it at a lower opportunity cost compared to another country. Opportunity cost measures the cost of producing one good in terms of the production of another good that must be foregone. Therefore, if a country can produce a good with a smaller amount of resources or at a lower cost compared to other countries, it has a comparative advantage in producing that good.

A Country Has a Comparative Advantage in Producing a Good