Question

In which situation does one country have a comparative advantage over another country?

Question 4 options:


its trade barriers are higher


the opportunity cost of its production is lower


its infrastructure is more advanced


its workers don't need to be paid as much

Answer 1

the 2nd one

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Answer 2

the opportunity cost of its production is lower

Step-by-step explanation:

We must understand for opportunity cost the cost of the alternative rejected for making that product.

For example if we made a boat, the wood and metal could be use for chair, tables or cars.

In a few words: it iswhat we give u to do what we are doing.

Thus, if a country has a better opportunity cost (it renounce to less output than the other) t means it can create more of that product as it is cheaper.

This makes a comparative advantage as the other country can produce more of this product but their cost will be higher than in our country with lower opportunity cost.

The comparative advantage are a great stimulus to trade as it makes a better use of the materials to increase the total output of the world economy