The correct answer is: A country has comparative advantage in production when its opportunity costs of producing a good are lower than another country's.
Comparative advantage is based on opportunity costs, meaning that a country has a comparative advantage in producing a good if it can produce that good at a lower opportunity cost than another country. This allows countries to specialize in producing goods where they have a comparative advantage and trade with other countries to maximize overall production and efficiency. Absolute advantage, on the other hand, refers to when a country can produce a good using fewer resources (inputs) than another country.
What distinguishes comparative advantage from absolute advantage in production?(1 point)
Responses
A country has comparative advantage in production when it requires more total inputs than does another country to produce the same output.
A country has comparative advantage in production when it requires fewer total inputs than does another country to produce the same output.
A country has comparative advantage in production when its opportunity costs of producing a good are lower than another country's.
A country has comparative advantage in production when its opportunity costs of producing a good are higher than another country's.
1 answer
1 answer