Which of the following holds true if a country is said to have a comparative advantage in the production of wheat?
A) The country can produce more wheat than any other nation.
B) The opportunity cost of producing wheat is the lowest in the country.
C) The price of wheat is the lowest in that country.
D) Domestic wheat is of the best quality in the world.
E) The country can produce only wheat.

Question

Quizplus · Accepted Answer

Comparative advantage refers to the ability of a country to produce a good or service at a lower opportunity cost than another country. Therefore, if a country has a comparative advantage in the production of wheat, it means that the opportunity cost of producing wheat is the lowest in that country. This does not necessarily mean that the country can produce more wheat than any other nation or that it can produce only wheat. It also does not necessarily mean that the price of wheat is the lowest in that country or that domestic wheat is of the best quality in the world.

Which of the Following Holds True If a Country Is