The United States has a comparative advantage in producing cotton if the U.S. price of cotton before international trade is ________ the world price.

Question

Quizplus · Accepted Answer

A country has a comparative advantage in producing a good if it can produce it at a lower cost than other countries. If the U.S. price of cotton before international trade is less than the world price, it indicates that the U.S. can produce cotton more efficiently (at a lower cost) than other countries, hence having a comparative advantage.

The United States Has a Comparative Advantage in Producing Cotton