Which of the following best describes comparative advantage?
A)If a state can produce the highest volume of wool in the world, that state should produce wool regardless of opportunity cost.
B)If a state can produce equal amounts of wine and wool, that state should produce whichever good is more expensive and desirable in the global economy.
C)If a state can produce wine at a lower opportunity cost than wool, that state should produce wine even if it could produce more wool than any other state in the world.
D)States should avoid producing wine, as wool is a more valuable resource to the economy.

Question

Quizplus · Accepted Answer

Comparative advantage refers to the ability of a state to produce a good at a lower opportunity cost than another good, suggesting it should specialize in the production of that good for which it has a comparative advantage, even if it could produce more of another good.

Which of the Following Best Describes Comparative Advantage