If Brazil has a comparative advantage relative to Cuba in the production of sugar cane,then
A)the average cost of production for sugar cane is lower in Brazil than in Cuba.
B)the implicit costs of production for sugar cane are lower in Brazil than in Cuba.
C)the opportunity cost of production for sugar cane is lower in Brazil than in Cuba.
D)the explicit cost of production for sugar cane is lower in Brazil than in Cuba.

Question

Quizplus · Accepted Answer

Comparative advantage means that a country can produce a good at a lower opportunity cost than another country. So, if Brazil has a comparative advantage in sugar cane production, it means that the opportunity cost of producing sugar cane in Brazil is lower than in Cuba. Therefore, choice C is correct. The other choices are incorrect because they focus on the cost of production rather than the opportunity cost.

If Brazil Has a Comparative Advantage Relative to Cuba in the Production