A country has a comparative advantage in a good if:
A) it can produce more of that good than any other country.
B) it does not have an absolute advantage in that gooB.
C) it has the lowest opportunity cost of producing that gooC.
D) no other country is willing to buy that good from it.

Question

Quizplus · Accepted Answer

Comparative advantage is determined by the opportunity cost of producing a good. If a country has the lowest opportunity cost of producing a good, then it has a comparative advantage in that good. It does not necessarily mean that the country can produce more of that good than any other country or that no other country is willing to buy that good from it. Having an absolute advantage also does not determine comparative advantage, as a country can still have a lower opportunity cost of producing a good even if another country can produce more of it.

A Country Has a Comparative Advantage in a Good If