If the opportunity cost of producing corn is lower for Ohio than Iowa,then:
A)Iowa should specialize in corn production.
B)Iowa has the comparative advantage in corn production.
C)Iowa should export corn to Ohio.
D)Ohio has the comparative advantage in corn production.

Question

Quizplus · Accepted Answer

The opportunity cost of producing corn is the cost of the next best alternative forgone. If the opportunity cost of producing corn is lower for Ohio than Iowa, it means that Ohio can produce corn at a lower cost in terms of the resources it has available. This implies that Ohio has a comparative advantage in corn production. Therefore, Ohio should specialize in corn production and Iowa should focus on producing other goods in which it has a comparative advantage.

If the Opportunity Cost of Producing Corn Is Lower for Ohio