Individuals A and B can both produce goods X and Y.Individual A has a comparative advantage in the production of X if

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Comparative advantage is determined by the opportunity cost, which is the amount of another good that has to be forgone to produce one unit of a good. Individual A has a comparative advantage in the production of X if the amount by which A must reduce production of Y is less than the amount by which B must reduce production of Y to produce an additional unit of X. This means that A has a lower opportunity cost of producing X than B, and therefore, A should focus on producing X while B should focus on producing Y.

Individuals a and B Can Both Produce Goods X and Y.Individual