Question

Which is an example of comparative advantage

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

Answer 1

B is an example of comparative advantage 

Answer 2

The correct answer is B) A country decides to create goods at half the cost of another country.

A comparative advantage refers to when a country can produce a good or service more efficiently than another country. In this case, one country can produce a good at a much lower price than another country. This type of comparison allows countries/individuals to better understand what the best use of their time is in comparison to other countries/individuals.