When a person possesses a comparative advantage in the production of one good or service, it:
A)means that the person's opportunity cost of producing that good or service 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

When a person possesses a comparative advantage in the production of one good or service, it:
A)​means that the person's opportunity cost of producing that good or service 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.

Quizplus · Accepted Answer

Possessing a comparative advantage allows for a more efficient use of resources, which leads to gains from trade being realized. This is because the person can produce the good or service at a lower opportunity cost than others, which means they can produce more of it and trade it for other goods or services they need. A, B, and C are incorrect because possessing a comparative advantage does not mean that the person's opportunity cost of producing that good or service is higher than for that of other goods, nor does it discourage specialization or promote greater self-sufficiency.

When a Person Possesses a Comparative Advantage in the Production