Final answer:
Comparative advantage refers to being the lowest relative opportunity cost producer of a good. It is fundamental to international trade and allows countries to specialize in the production of certain goods, thus improving overall efficiency and consumption levels.
Step-by-step explanation:
The correct option : c
Comparative advantage is a key principle in international trade and is vital for understanding why different countries engage in trading goods and services. It exists when a country or an individual can produce a certain good or service at a lower opportunity cost than others. This concept was first introduced by economist David Ricardo and serves as the foundation for the theory of international trade. For example, if Country A can produce wheat more efficiently than it produces cars, while Country B can produce cars more efficiently than it produces wheat, even if Country A is more efficient at producing both goods, each country will benefit by specializing in the production of the good for which it has a comparative advantage.
They can then trade to obtain other goods at lower costs than if they attempted to produce everything themselves. In essence, comparative advantage allows for increased efficiency and higher levels of consumption, as countries are able to specialize and leverage their unique strengths in production.