Question

If a firm or a nation desires to maximize its output, each productive assignment should be carried out by those persons who Group of answer choices have the highest opportunity cost. have a comparative advantage in the productive activity. can complete the productive activity most rapidly. least enjoy performing the productive activity.

Answer 1

have a comparative advantage in the productive activity.

Step-by-step explanation:

A person has comparative advantage in production if it produces at a lower opportunity cost when compared to other people. It means that the person is more efficient in the production of that good when compared with other people.

For example, farmer A produces 10kg of lettuce and 5kg of wheat. Country B produces 5kg of lettuce and 10kg of wheat.

for farmer A,

opportunity cost of producing lettuce = 5/10 = 0.5

opportunity cost of producing wheat = 10/5 = 2

for farmer B,

opportunity cost of producing lettuce = 5/10 = 0.5

opportunity cost of producing wheat = 10/5 = 2

Farmer A has a comparative advantage in the production of lettuce and farmer B has a comparative advantage in the production of wheat

Farmer A should produce lettuce and farmer B should produce wheat in order to maximise output