Question

A comparative advantage is the ability of a country to produce a particular good or service at a lower ____________ than another country.

Answer 1

Answer:

(opportunity cost) A comparative advantage is the ability of a country to produce a particular good or service at a lower opportunity cost than another country.

Explanation:

The ability of producing a product or a service at a reduced cost of production than that of the competitors is referred to be an absolute advantage. The ability of producing a product or a service at low opportunity cost than that of the competitors is referred to be Comparative advantage. When a product is produced in an efficient manner than a competitor which is at a reduced it is an absolute advantage. Comparative advantage means that, instead of producing some other goods at some costs, a particular good can be produced at a lower cost. This is also termed as an opportunity cost.

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