What economic concept is the most relevant when defining comparative advantage?
A) opportunity cost
B) equity
C) scarcity
D) efficiency

Question

Quizplus · Accepted Answer

Comparative advantage is based on the idea of opportunity cost, which is the benefit a person or country forgoes when choosing one alternative over another. For example, if Country A can produce either 10 cars or 20 computers with the same resources, and Country B can produce either 5 cars or 10 computers with the same resources, then Country A has a comparative advantage in producing computers, while Country B has a comparative advantage in producing cars. This is because Country A has a lower opportunity cost for producing computers (only giving up half the production of cars) compared to Country B (giving up producing twice as many computers).

What Economic Concept Is the Most Relevant When Defining Comparative