Comparative advantage implies choosing the activity that

Question

Quizplus · Accepted Answer

According to the principle of comparative advantage, a country should specialize in the production of the good or service for which it has the lowest opportunity cost. Therefore, Choice C, which states that the activity with the lowest opportunity cost should be chosen, is the best answer. The other choices are incorrect because having a high opportunity cost would suggest that a different activity should be chosen, being inside the production possibilities frontier is not necessary for comparative advantage, and specialization is often required in order to achieve comparative advantage.

Comparative Advantage Implies Choosing the Activity That