If nation A has a comparative advantage over nation B in the production of a product, this implies:

Question

Quizplus · Accepted Answer

Comparative advantage implies that a country can produce a good at a lower opportunity cost than another country. This means that the cost of producing the good in terms of some other good's production that must be sacrificed is lower in country A than in country B. So, choice B is the correct answer. Option A is incorrect because it only focuses on the use of fewer resources, which doesn't necessarily mean that the production cost is lower. Option C is also incorrect because nation B could still benefit by importing other products that they could produce at lower opportunity costs. Options D and E are incorrect because comparative advantage suggests that countries should specialize in producing goods that they can produce at a lower opportunity cost and trade with other countries for goods that they cannot produce efficiently.

If Nation a Has a Comparative Advantage Over Nation B