If Jim can sell paper at a lower opportunity cost than Dwight can,then:
A) Jim has an absolute advantage in paper sales.
B) Dwight has an absolute advantage in paper sales.
C) Jim has a positive advantage in paper sales.
D) Jim has a comparative advantage in paper sales.
E) Dwight has a comparative advantage in paper sales.

Question

Quizplus · Accepted Answer

Comparative advantage is the ability of an individual or entity to produce a product or service at a lower opportunity cost than others. So, if Jim can sell paper at a lower opportunity cost (meaning he has to give up less of other goods or services to produce paper) than Dwight, Jim has a comparative advantage in paper sales. Therefore, the correct answer is D.

If Jim Can Sell Paper at a Lower Opportunity Cost