Under what condition does a nation have a comparative advantage over another nation in the production of cars?
A) if it can produce cars with more resources than the other country
B) if it can produce cars at a lower opportunity cost than the other country
C) if it can produce cars with fewer resources than the other country
D) if it can produce cars at a higher opportunity cost than the other country

Question

Quizplus · Accepted Answer

A nation has a comparative advantage in the production of a good if it can produce that good at a lower opportunity cost than another nation. In this case, if one nation can produce cars with a lower opportunity cost than another nation, it has a comparative advantage in car production.

Under What Condition Does a Nation Have a Comparative Advantage