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31 October, 10:47

Select the correct definition of the term "comparative advantage." the ability to produce a good or service at a lower opportunity cost than another the ability to produce a good or service at a higher opportunity cost than another a nation offering more favorable trade policy with its allies than with other countries the ability to produce less of a good or service than another over a specified time period the ability to produce more of a good or service than another over a specified time period

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  1. 31 October, 10:50
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    The correct answer is: the ability to produce a good or service at a lower opportunity cost than another.

    Explanation:

    Comparative advantage implies the ability to produce a good at lower opportunity cost. Opportunity cost is the cost of giving up the alternative.

    A nation is considered to be enjoying a comparative advantage in the production of a good if it can produce the good at a relatively lower opportunity cost than other nations.

    A nation is said to be specializing in the production of a commodity if it has a comparative advantage in production.
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