When a producer has the ability to produce a good or service at a lower opportunity cost than others,economists say the producer:
A)has an absolute advantage at producing that good.
B)has a comparative advantage at producing that good.
C)has no reason to trade with others.
D)is efficient.

Question

Quizplus · Accepted Answer

When a producer has a lower opportunity cost than others, it means that they have a comparative advantage over others in producing that good or service. This means that they can produce the good at a lower cost (in terms of resources or time) than others, and therefore can potentially sell it at a lower price while still making a profit. This concept is the basis for international trade, as countries with different comparative advantages can benefit from trading with each other.

When a Producer Has the Ability to Produce a Good