An economy is said to have a comparative advantage in the production of one good if it:
A)can produce more of all goods than another economy.
B)can produce fewer of all goods than another economy.
C)has the highest opportunity cost of producing a particular good.
D)has the lowest opportunity cost of producing a particular good.

Question

Quizplus · Accepted Answer

A comparative advantage exists when an economy can produce a particular good or service at a lower opportunity cost than another economy. This means that they must give up less of another good or service in order to produce the same amount of the particular good. Therefore, the economy with the lowest opportunity cost has a comparative advantage in the production of that good.

An Economy Is Said to Have a Comparative Advantage in the Production