Individuals A and B both produce good X. A has a comparative advantage in the production of good X if A
A) has a lower opportunity cost of producing good X than has B.
B) has a lower opportunity cost of producing good X than of producing good Y.
C) can produce more units of X in a given time period than can B.
D) can produce X using newer technology than can B.

Question

Quizplus · Accepted Answer

A comparative advantage exists when an individual or country can produce a good at a lower opportunity cost than another. This does not necessarily relate to the total output or the technology used, but rather to the efficiency of producing one good over another.

Individuals a and B Both Produce Good X