Comparative advantage refers to:
A)a situation where the relative price of a domestic good is the same in two countries
B)one country's ability to control domestic and world prices
C)the situation where one country can produce a good relatively more cheaply than another country
D)a situation where there is increased competition due to trade

Question

Quizplus · Accepted Answer

Comparative advantage refers to the situation where one country can produce a good relatively more cheaply than another country. This means that the country has a lower opportunity cost of producing the good and should specialize in producing and exporting that good, while importing other goods that other countries can produce more efficiently.

Comparative Advantage Refers To