When economists say that an individual or country has the comparative advantage in the production of a good, it means that they:
A) can produce more of the good than anyone else.
B) are the lowest-opportunity-cost producer of the good.
C) are the highest-opportunity-cost producer of the good.
D) are operating on their production possibilities frontier.

Question

Quizplus · Accepted Answer

Comparative advantage is based on opportunity cost, which means the value of the next best alternative that must be given up to produce a good. The individual or country with the lowest opportunity cost in producing a particular good has the comparative advantage. Therefore, choice B is the correct answer.

When Economists Say That an Individual or Country Has the Comparative