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

Question

Quizplus · Accepted Answer

A nation has a comparative advantage when it is able to produce a certain good or service at a lower opportunity cost than its trading partners. This means that the nation can benefit from trade by exporting the goods or services in which it has a comparative advantage and importing goods or services in which it has a comparative disadvantage. By doing so, the nation can increase its consumption possibilities beyond what it would be able to achieve by producing everything domestically. Therefore, having a comparative advantage means that a nation can benefit from trade.

Having a Comparative Advantage Means a Nation Can