When does a country have a comparative advantage in the production of a good?
A) when they can produce it at a lower dollar cost
B) when they produce it using more labour and less capital
C) when they can produce it at a lower opportunity cost
D) when they produce it using fewer natural resources

Question

Quizplus · Accepted Answer

A country has a comparative advantage in the production of a good when they can produce it at a lower opportunity cost. This means that the country can produce the good at a lower cost in terms of other goods and services that it would otherwise have produced if it did not specialize in producing the good. This allows the country to trade the good it produces with other countries and benefit from the gains from trade.

When Does a Country Have a Comparative Advantage in the Production