For a nation to have ________ in producing a good it must have a lower opportunity cost of producing that good than the other country.

Question

Quizplus · Accepted Answer

Comparative advantage occurs when a nation can produce a good at a lower opportunity cost than another nation. This means that the nation has a relative advantage in producing that good, but not necessarily an absolute advantage (which would mean it can produce the good at a lower cost than any other nation). Autarky advantage refers to a situation where a nation can produce a good more cheaply by not trading with other countries, but this is not the same as comparative advantage. Therefore, the best choice is A) a comparative advantage.

For a Nation to Have ________ in Producing a Good