Select the correct definition of the term "comparative advantage." the ability to produce a good or service at a lower opportuni
ty cost than another the ability to produce a good or service at a higher opportunity cost than another a nation offering more favorable trade policy with its allies than with other countries the ability to produce less of a good or service than another over a specified time period the ability to produce more of a good or service than another over a specified time period
The correct answer is: the ability to produce a good or service at a lower opportunity cost than another.
Explanation:
Comparative advantage implies the ability to produce a good at lower opportunity cost. Opportunity cost is the cost of giving up the alternative.
A nation is considered to be enjoying a comparative advantage in the production of a good if it can produce the good at a relatively lower opportunity cost than other nations.
A nation is said to be specializing in the production of a commodity if it has a comparative advantage in production.
This can be a deterrent for engaging in practices that are ethically wrong during underwriting process. Knowing that they could be fined large amount of money if found to be engaging in acts that ethically incorrect will serves to discourage investment banking firms from such acts.<span />
