Suppose a producer can produce shoes with lower opportunity cost than boots.What else do we need to know if we want to determine this producer's comparative advantage?
A)how this producer's opportunity cost compares with other producer's opportunity cost
B)nothing, the producer has a comparative advantage in boots.
C)how many hours of work each product requires
D)nothing, the producer has a comparative advantage in shoes

Question

Quizplus · Accepted Answer

In order to determine the producer's comparative advantage, we need to compare their opportunity cost with that of other producers. Just because they have a lower opportunity cost for producing shoes, it does not necessarily mean they have a comparative advantage overall. We need to compare their opportunity cost in producing boots as well as look at the opportunity cost of other producers in the market.

Suppose a Producer Can Produce Shoes with Lower Opportunity Cost