Comparative advantage is
A) the ability to perform an activity at a lower opportunity cost than anyone else.
B) another name for absolute advantage.
C) the ability to perform an activity at a zero opportunity cost.
D) the ability to perform an activity at a higher opportunity cost than anyone else.

Question

Quizplus · Accepted Answer

Comparative advantage refers to the ability to produce a good or service at a lower opportunity cost than another producer. It is not the same as absolute advantage, which is the ability to produce more of a good or service using the same amount of resources. It is also not possible for an activity to have a zero opportunity cost, so option C is incorrect. Option D is also incorrect because having a higher opportunity cost than anyone else means that a producer has a disadvantage, not a comparative advantage. Therefore, the best answer is A.

Comparative Advantage Is