For a nation that finds it has a comparative advantage in producing good Z,it is likely that the size of the comparative advantage will
A) decline due to competition.
B) grow as production experience increases.
C) remain constant.
D) decline as production experience increases.
E) change in unpredictable ways.

Question

Quizplus · Accepted Answer

The comparative advantage of a nation in producing a good is determined by evaluating the opportunity cost of producing that good compared to other goods that could be produced instead. If a nation finds it has a comparative advantage in producing good Z, it means that producing Z has a lower opportunity cost compared to other goods. As production experience increases, the efficiency of the production process improves, leading to lower costs and higher output for the same level of inputs. This will lead to a growth in the size of the comparative advantage, making it more advantageous for the nation to specialize in producing good Z. Therefore, option B is the correct answer.

For a Nation That Finds It Has a Comparative Advantage