Question

If a country has a comparative advantage in the production of a good:

O a. it will not find trade beneficial because other country(ies) won't have a comparative advantage in other goods.
O b. it can produce that good at a lower opportunity cost.
O c. it will find trade most beneficial when it trades with another country that has a comparative advantage in the same good.
O d. it must also have an absolute advantage in the good.

Answer 1

The correct answer is option b, indicating that a country with a comparative advantage can produce a good at a lower opportunity cost than others.

Step-by-step explanation:

If a country has a comparative advantage in the production of a good, it means it can produce that good at a lower opportunity cost than other countries. The correct answer to the question is option b. Countries should specialize in goods where they have a comparative advantage and trade for goods where other countries have a comparative advantage. This specialization and subsequent trade allow for higher levels of production and consumption for all countries. It is important to note that having a comparative advantage is not the same as having an absolute advantage, which refers to the ability to produce more of a good using the same amount of resources.