Comparative Advantage Is Based on Opportunity Costs
Comparative advantage is based on opportunity costs.
The law of comparative advantage says that a person should produce a good if she A) has the greatest desire to consume that good B) has the lowest opportunity cost of producing that good C) has an absolute advantage in a related activity D) has a comparative advantage in a related activity E) is equally good at producing this good as someone else is
The law of comparative advantage says that A) the individual with the lowest opportunity cost of producing a particular good should produce it B) comparative advantage exists only when one person has an absolute advantage in the production of two goods C) whoever has a comparative advantage in producing a good also has an absolute advantage in producing that good D) whoever has an absolute advantage in producing a good also has a comparative advantage in producing that good E) gains from trade are possible only when one person has the comparative advantage in producing both goods
Comparative advantage is A) the ability of an individual to specialize and produce a greater amount of some good than can another individual B) the number of units of one good given up in order to acquire something C) the ability of an individual to produce a good at a lower opportunity cost than some other individual can D) an expression for the amount of labor a particular individual needs to produce a fixed amount of capital goods E) a reference to an individual having the greatest opportunity cost of producing the good and produces it with the fewest resources