When does an individual have a comparative advantage in production?
A) when they are more self-sufficient than others
B) when they can produce at the highest opportunity cost
C) when they can produce at the lowest opportunity cost
D) when they are less self-sufficient than others

Question

Quizplus · Accepted Answer

An individual has a comparative advantage in production when they can produce at the lowest opportunity cost. This means that they are giving up a smaller amount of one good to produce an additional unit of another good compared to other individuals or countries. This allows for more efficient trade between parties with different comparative advantages. Options A and D regarding self-sufficiency do not necessarily indicate comparative advantage in production. Option B is incorrect as the individual with the highest opportunity cost would have a comparative disadvantage in production compared to others.

When Does an Individual Have a Comparative Advantage in Production