Question

Which situation is an example of comparative advantage?

A country decides to export goods when another country does not.
A country decides to create goods at half the cost of another country.
A country decides to grow wheat and when another country raises cattle.
A country decides to invest in technology and another country does not.

Answer 1

a country decides to create goods at half the cost of another country

Answer 2

The situation that is an example of comparative advantage is "a country decides to create goods at half the cost of another country".

Comparative advantage is an economic law referring to the ability of a country to produce goods and services at a lower opportunity cost than other countries.