Table 3.2
-Producer A has a comparative advantage over Producer B if,in producing a good,
A) A can produce more of the good than B can in a given time period.
B) A has a lower opportunity cost of producing the good than does B.
C) A has to trade off more than B does to produce the good.
D) A has a higher opportunity cost of producing the good than does B.

Question

Table 3.2
-Producer A has a comparative advantage over Producer B if,in producing a good,
A) A can produce more of the good than B can in a given time period. 
B) A has a lower opportunity cost of producing the good than does B. 
C) A has to trade off more than B does to produce the good. 
D) A has a higher opportunity cost of producing the good than does B.

Quizplus · Accepted Answer

Comparative advantage is related to the opportunity cost. A producer has a comparative advantage in producing a good when they have a lower opportunity cost of producing that good than another producer. Therefore, choice B is the correct answer.

Table 3.2 -Producer a Has a Comparative Advantage Over Producer B If,in