Which of the following best describes comparative advantage?
A)Using the fewest number of resources to produce a given amount of output.
B)It is the same as absolute advantage.
C)Being able to produce more output than any other country.
D)Forgoing the fewest units of one product to produce a unit of another product.
E)Having the largest number of resources compared to other countries.

Question

Quizplus · Accepted Answer

Comparative advantage refers to the ability of a country to produce a specific good or service at a lower opportunity cost than another country. Opportunity cost is the value of the next best choice that must be forgone in order to produce something else. Therefore, having a comparative advantage means being able to produce a product or service with the lowest opportunity cost, which translates into forgoing the fewest units of one product to produce a unit of another product.

Which of the Following Best Describes Comparative Advantage