Recall the Application about productivity in the nation of Latvia in the 1990s to answer the following question(s).
-According to this Application, workers in the EU were more productive than workers in Latvia in the 1990s, yet EU nations still purchased products from Latvia. This is because Latvia ________ in the production of the products it sold to EU nations.
A) had an absolute advantage
B) had a comparative advantage
C) used fewer resources
D) had a higher opportunity cost

Question

Quizplus · Accepted Answer

Latvia had a comparative advantage in the production of the products it sold to EU nations, meaning that it was able to produce those products at a lower opportunity cost compared to other goods and compared to EU nations. Therefore, even though EU workers were more productive overall, Latvia could still produce these specific products at a lower cost and be competitive in the market.

Recall the Application About Productivity in the Nation of Latvia