What economic concept is the most relevant when defining comparative advantage?
A)opportunity cost
B)sunk cost
C)scarcity
D)efficiency

Question

Quizplus · Accepted Answer

Comparative advantage is based on the concept of opportunity cost, which is the cost of giving up the next best alternative when making a choice. In the context of international trade, comparative advantage occurs when one country can produce a good or service with a lower opportunity cost than another country. Therefore, understanding opportunity cost is critical to determining which countries have a comparative advantage in producing particular goods or services. Sunk cost (B), scarcity (C), and efficiency (D) are relevant concepts in economics but are not directly related to defining comparative advantage.

What Economic Concept Is the Most Relevant When Defining Comparative