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Economizing requires that any particular good be produced by the nation having the ______ domestic opportunity cost, or the ______ advantage for that good.

A. greatest; absolute
B. lowest; absolute
C. greatest; comparative
D. lowest; comparative

1 Answer

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Final answer:

The correct answer is D: lowest; comparative. A nation should specialize in producing and trading goods where it has the lowest opportunity cost or comparative advantage.

Step-by-step explanation:

Economizing requires that any particular good be produced by the nation having the lowest domestic opportunity cost, or the comparative advantage for that good. The correct answer is D. lowest; comparative.

In international trade, a nation has a comparative advantage in producing a product when it can do so at a lower opportunity cost compared to other nations. Conversely, a nation has an absolute advantage if it can produce the product using fewer resources than another nation. Specializing in goods where a nation has a comparative advantage, and trading for other goods, increases the global production and consumption efficiently.

User Michael Navara
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