Comparative advantage is the ability to perform an activity at a lower opportunity cost. determine who your best trading partners are. determine the best use of capital goods. convince others of the best choices to make in their own self-interest.

Question

Willie Stanley

Business

10 December, 16:00

Comparative advantage is the ability to perform an activity at a lower opportunity cost. determine who your best trading partners are. determine the best use of capital goods. convince others of the best choices to make in their own self-interest.

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Answers (1)

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Cookie · Answer 1

The correct answer is: the ability to perform an activity at a lower opportunity cost.

Explanation:

Comparative advantage refers to the situation where an individual, firm or nation can produce a good or service at a lower opportunity cost than others.

Individuals and nations are able to specialize because of comparative advantage.

Both the trade partners can gain from trade through specialization and comparative advantage.

Absolute advantage refers to the situation where an individual, firm or nation can produce a good or service at a relatively lower cost.