Question

A country has a comparative advantage in a good if: Select one: a. it does not have an absolute advantage in that good. b. no other country is willing to buy that good from it. c. it can produce more of that good than any other country. d. it has the lowest opportunity cost of producing that good

Answer 1

Option (D) is correct.

Step-by-step explanation:

A country has a comparative advantage in producing a commodity if the opportunity cost of producing that good is lower than the other country in terms of other goods.

A country is exporting a commodity in which it has a comparative advantage because of the lower opportunity cost associated with the production of this commodity. Alternatively, a country is importing a commodity in which has a comparative disadvantage because other country has a lower opportunity cost.