A country possesses a comparative advantage in the production of a good if
A) the opportunity cost in terms of forgone output of alternative goods is lower for this country than it is for its trading partners.
B) it possesses an absolute advantage in the production of this good.
C) it is able to produce more of this good per hour than can any other country.
D) all of the above.

Question

Quizplus · Accepted Answer

Comparative advantage occurs when a country can produce a good at a lower opportunity cost than its trading partners, not necessarily because it can produce more of it or has an absolute advantage.

A Country Possesses a Comparative Advantage in the Production of a Good