Having a comparative advantage means a nation can
A) benefit from trade.
B) produce at a higher opportunity cost.
C) produce more of the good.
D) produce without incurring an opportunity cost.
E) produce the good at a point beyond its PPF.

Question

Quizplus · Accepted Answer

Comparative advantage means that a nation can produce a good at a lower opportunity cost than another nation. This allows for mutually beneficial trade where each nation specializes in producing the good in which they have a comparative advantage and trades with the other nation for goods in which they do not have a comparative advantage. This results in both nations benefiting from trade.

Having a Comparative Advantage Means a Nation Can