When a person possesses a comparative advantage in the production of one good or service,it:
A) means that the person's opportunity cost is higher than for that of other goods.
B) discourages specialization.
C) promotes greater self-sufficiency.
D) permits gains from trade to be realized due to a more efficient use of resources.

Question

Quizplus · Accepted Answer

When a person possesses a comparative advantage in the production of one good or service, it means that they can produce that good or service at a lower opportunity cost than their trading partner. This allows for a more efficient use of resources and higher productivity, leading to gains from trade for both parties involved. Therefore, option D is correct. Option A is incorrect because a comparative advantage means a lower opportunity cost, not a higher one. Option B is incorrect because a comparative advantage encourages specialization. Option C is incorrect because comparative advantage promotes interdependence, not self-sufficiency.

When a Person Possesses a Comparative Advantage in the Production