Question

Canada and the U.S. both produce wheat and computer software. Canada is said to have the comparative advantage in producing wheat if ________.

a. Canada requires fewer resources than the U.S. to produce a bushel of wheat.
b. the opportunity cost of producing a bushel of wheat is lower for Canada than it is for the U.s
c. the opportunity cost of producing a bushel of wheat is lower for the U.S. than it is for Canada.
d. the U.S. has an absolute advantage over Canada in producing computer software.

Answer 1

The correct option is B) the opportunity cost of producing a bushel of wheat is lower for Canada than it is for the U.S.

Step-by-step explanation:

In economics, opportunity cost can be described as choosing an option from alternatives . Foe example, if we spend our time watching a movie,we lost our time for reading a book.

If the opportunity cost to produce a product will be lower, that means that the product will be more beneficial. For example, due to certain circumstances the opportunity cost of producing a bushel of what is lower as compared to that of U.S. Hence, Canada will have comparative advantage when compared with U.S.