In a two-country two-good model, if a country has a comparative advantage in the production of a certain good, it implies that this country:
A)also has an absolute advantage in the production of this good.
B)will start importing this good from the other country.
C)can produce this good at a lower opportunity cost than the other country.
D)uses most of its resources in the production of this good .

Question

Quizplus · Accepted Answer

Comparative advantage means that a country can produce a certain good at a lower opportunity cost than another country. This does not necessarily imply absolute advantage or that the country will start importing the good from another country. It also does not mean that the country uses most of its resources in the production of this good, only that it can produce it at a lower opportunity cost.

In a Two-Country Two-Good Model, If a Country Has a Comparative