According to the law of comparative advantage, if a firm or a nation desires to maximize its output, each productive assignment should be carried out by those who
A) have the highest opportunity cost.
B) have the lowest opportunity cost.
C) have an absolute advantage in the productive activity.
D) can complete the productive activity most rapidly.

Question

Quizplus · Accepted Answer

The law of comparative advantage states that each productive assignment should be carried out by those who have the lowest opportunity cost. This means that resources should be allocated based on comparative advantage rather than absolute advantage. By doing so, each person or nation can specialize in the production of goods or services that they are relatively more efficient in producing, resulting in increased productivity and overall output.

According to the Law of Comparative Advantage, If a Firm