If a nation's labor can produce more of a good compared to labor in another nation, then we say that the first nation has a comparative advantage in producing that good.

Question

Quizplus · Accepted Answer

Comparative advantage refers to the ability of a nation to produce a good at a lower opportunity cost compared to another nation, not necessarily more of the good. Absolute advantage is when a nation can produce more of a good.

If a Nation's Labor Can Produce More of a Good