Question

According to the law of comparative advantage, both individuals and nations will be able to produce a larger joint output if each productive activity is undertaken by Question 22 options: the high opportunity cost producer. the low opportunity cost producer. the producer who is able to hire workers at the lowest wage. the party that can complete the productive activity most rapidly.

Answer 1

Answer:

the low opportunity cost producer. 

Explanation:

A person or nation has comparative advantage in production if it produces at a lower opportunity cost when compared with other countries or people.

For example, let's assume country x produces either 10 Apples or 5 oranges in 1 hour while country y produces either 20 Apples or 2 oranges in one hour. The opportunity cost for country x of producing apples and oranges are 0.5 and 2 respectively. While for country y, the oopportunity cost of producing apples and oranges are 0.1 and 10 respectively.

Country y has an opportunity cost and comparative advantage in the production of Apples while country x has a comparative advantage in production of oranges.

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