Final answer:
The statement is false; comparative advantage involves lower opportunity costs, not necessarily lower costs in monetary terms. It's about efficiency in production in terms of what is sacrificed to produce another good.
Step-by-step explanation:
The statement that a farmer has a comparative advantage at growing wheat if his cost of growing wheat is less than the cost of another farmer growing wheat is False. Comparative advantage refers to the situation where a producer can make a product at a lower opportunity cost than another producer, not necessarily at a lower monetary cost. It's about the ability to produce goods more efficiently, considering what is given up to produce another good. For example, if two farmers specialize in different crops, even if one can grow wheat at a lower cost, they each may have a comparative advantage in their respective crops due to lower opportunity costs, which is determined by what they must give up in order to produce the wheat.
Comparative advantage is crucial in international trade because it guides countries in deciding which goods they should produce and trade. For instance, suppose the US can produce wheat more efficiently in comparison to Brazil, not because its production cost is lower, but because it gives up less of other goods to do so, thus it has a lower opportunity cost in wheat production. This concept is illustrated through the Production Possibility Frontiers (PPF) of the two countries, which show the opportunity costs of producing one good over another.