Comparative advantage is the ability to produce:

Question

Quizplus · Accepted Answer

Comparative advantage refers to the ability to produce a good or service at a lower opportunity cost than others. This means that if two countries both have the same amount of resources, but one can produce a particular good or service with a lower opportunity cost than the other, then the country with the lower opportunity cost has a comparative advantage in producing that good or service. This allows for more efficient resource allocation and trade between countries. Option A is incorrect, as producing more of a good is not necessarily indicative of comparative advantage. Option B is also incorrect, as comparative advantage relates to opportunity cost, not absolute production levels. Option D is partially correct, but does not account for the concept of opportunity cost as the basis for comparative advantage.

Comparative Advantage Is the Ability to Produce