Question

Comparative advantage is the ability to produce more of a given product using a given amount of resources. A. True B. False

Answer 1

The correct answer is: "TRUE".

A comparative advantage is defined as the superiority that a country or producer enjoys, and which enables him to manufacture a certain product at a lower cost, or with a higher quality, if compared to its competitors. Therefore, this producer becomes the most efficient and he is able to elaborate the product with the lowest opportunity cost, an obtain a larger amount of output given the same endownment of resources.

Countries or companies specialize on producing the goods or services where they have acquired a comparative advantage.

Answer 2

No, it is false that comparative advantage is the ability to produce more of a given product using a given amount of resources, since in economics this phrase refers to the fact that it can still be in your advantage to trade with another entity even if you're producing less.