Question

Comparative advantage is the ability to produce: Multiple Choice more of a good than others with a given amount of resources. relatively more than any other good with a given amount of resources. a good or service at a lower opportunity cost than others. more of a good at a lower cost.

Answer 1

Answer:

a good or service at a lower opportunity cost than others.

Explanation:

A country has a comparative advantage in production if it produces at a lower opportunity cost when compared to other countries.

For example :

there are two countries , A and B

A produces 10 kg of rice and 5 kg of beans.

B produces 5 kg of rice and 10 kg of beans

the opportunity cost of A :

in producing rice = 5/10 = 0.5

In producing beans = 10/5 = 2

the opportunity cost of B :

in producing rice = 10/5 = 2

In producing beans = 5/10 = 0.5

A has a lower opportunity cost and a comparative advantage in the production of rice.

B has a lower opportunity cost and a comparative advantage in the production of beans.