Question

Which economic term refers to the situation where one country can manufacture and export automobiles at a lower cost than its competitors? A. opportunity cost B. comparative advantage C. inflation D. consumer price index (CPI) E. gross domestic product (GDP)

Answer 1

Answer:

B. comparative advantage

Explanation:

Answer 2

The correct answer is B.

Comparative advantage is an economic term that refers to the process of producing goods and services at a lower cost than the competition.

A comparative advantage gives a company the ability to sell goods and services at a lower price than its competitors and thus obtain stronger sales margins.

Comparative advantage suggests that countries would trade with each other, exporting the goods that they have a relative advantage in productivity.

This term is attributed to the English economist David Ricardo in 1817.