Question

When a country has a comparative advantage in the production of a good, it means that it can produce this good at a lower opportunity cost than its trading partner.
a. True
b. False

Answer 1

Answer:

A. True

Explanation:

Opportunity cost is an economic term for expressing cost in terms of forgone alternative. Also, comparative cost advantage is when a country is able to produce goods and services at a much lower opportunity cost , rather than in terms of quality or larger output.

Comparative advantage gives a country an edge in the production of certain goods compared to a trading partner, hence she is able to leverage on such production and substitute it for other goods.