Question

The idea behind comparative advantage reflects the possibility that one party: A. may be able to produce everything relatively more efficiently than another party. B. may be able to produce something at a lower opportunity cost than another party. C. may be able to produce something at a lower dollar cost than another party. D. with an absolute advantage in producing two different may export goods both of those goods to the other party.

Answer 1

Answer: Option (C) is correct.

Explanation:

In economic sense, a nation or organizations tend to have comparative advantage in producing a commodity or service if they produce or manufacture that good at a much lower opportunity cost which is also known as the autarky price. Comparative advantage tends to elaborate economic reality of gains from trade happening for firms, individuals, and nations, these tend to arise from gap in between their technological progress or factor endowments.