Question

An individual has a comparative advantage in producing a good or service if the opportunity cost of producing the good or service is higher for that individual than for other people. This is _____. Please choose the correct answer from the following choices, and then select the submit answer button. Answer choices false

1. True
2. False:

Answer 1

2. False

Step-by-step explanation:

A person has comparative advantage in production if he produces at a lower opportunity cost when compared with other people.

For example, there are two bakers, Jean and Vincent. Vincent can produce either 5 cakes or 10 pizzas in 1 hour while Jean can produce either 8 cakes or 12 pizzas in one hour.

The opportunity cost for producing cake is:

Jean = 10/5 =2

Vincent = 12 / 8 = 1.5

Vincent has a lower opportunity cost when compared with Vincent in the production of cake, therefore, he has a comparative advantage.

I hope my answer helps you