If a nation has a comparative advantage in the production of product X,this means that the nation:
A)cannot benefit by producing and trading this product
B)must give up less of other products than other nations in producing a unit of X
C)has production choices identical to those of other nations
D)is not able to produce this product efficiently
E)should import this product

Question

Quizplus · Accepted Answer

When a nation has a comparative advantage in the production of a product, it means they can produce it at a lower opportunity cost compared to other nations. This means they have to give up less of other products, hence option B is correct. Option A is incorrect because having a comparative advantage means that the nation can benefit by producing and trading the product. Option C is incorrect because having a comparative advantage means that the nation has different production choices. Option D is incorrect because having a comparative advantage means that the nation can produce the product efficiently. Option E is incorrect because having a comparative advantage means that the nation should export the product, not import it.

If a Nation Has a Comparative Advantage in the Production