You have a comparative advantage in producing a good whenever:
A) you enjoy producing that good.
B) you can produce more of the good than someone else can using the same resources.
C) your opportunity cost is constant.
D) your opportunity cost of producing that good is lower than that of other producers.
E) you have specific training in the production of that good.

Question

Quizplus · Accepted Answer

Comparative advantage is determined by the opportunity cost of producing a good. If a producer has a lower opportunity cost of producing a good than another producer, then they have a comparative advantage in producing that good. Therefore, option D is the correct answer. Option A is incorrect as enjoyment of producing a good does not necessarily determine comparative advantage. Option B is incorrect as the question is comparing your production to that of another individual, not to the maximum potential production. Option C is also incorrect as comparative advantage is determined by the opportunity cost, which may vary based on the level of production. Option E could be a factor, but not necessarily the determining factor in determining comparative advantage.

You Have a Comparative Advantage in Producing a Good Whenever