If country X can produce a unit of good 1 at a lower opportunity cost than can country Y, it is correct to state that country X
A) has a comparative advantage in producing good 1.
B) has an absolute advantage in producing good 1.
C) will import good 1 from country Y.
D) will not produce good 1.

Question

Quizplus · Accepted Answer

Comparative advantage means that a country can produce a good at a lower opportunity cost than another country. Therefore, if country X can produce a unit of good 1 at a lower opportunity cost than country Y, then country X has a comparative advantage in producing good 1.

If Country X Can Produce a Unit of Good 1