Which of the following best describes comparative advantage?

Question

Quizplus · Accepted Answer

Comparative advantage refers to the ability of a country or individual to produce a particular good at a lower opportunity cost than another country or individual. This means that they must forgo the fewest units of one product to produce a unit of another product. Therefore, option D is the best choice. Option A is incorrect because producing more output does not necessarily mean having a comparative advantage. Option B is incorrect because using fewer resources does not necessarily mean having a comparative advantage. Option C is incorrect because having more resources does not necessarily mean having a comparative advantage. Option E is incorrect because comparative advantage is not the same as absolute advantage.

Which of the Following Best Describes Comparative Advantage