If Nation A can produce shirts at a lower opportunity cost than any other nation,Nation A is said to have a(n)________ in the production of shirts.

Question

Quizplus · Accepted Answer

Comparative advantage is the ability of a country or entity to produce a good at a lower opportunity cost than others. As Nation A can produce shirts at a lower opportunity cost than any other nation, it has a comparative advantage in the production of shirts. Autarky refers to a situation where a country or entity does not trade with other nations and produces everything that it consumes. Absolute advantage is the ability to produce more output with the same input or the ability to produce the same output with fewer inputs. Comparative disadvantage is not a term used in economics.

If Nation a Can Produce Shirts at a Lower Opportunity