When a person has a comparative advantage in producing a good or service, the person has A. a higher opportunity cost in producing that product than someone else. B. a constant opportunity cost in producing that product. C. a decreasing opportunity cost in producing that product. D. a lower opportunity cost in producing that product than someone else.

Question

Myles Bates

Business

12 May, 22:48

When a person has a comparative advantage in producing a good or service, the person has A. a higher opportunity cost in producing that product than someone else. B. a constant opportunity cost in producing that product. C. a decreasing opportunity cost in producing that product. D. a lower opportunity cost in producing that product than someone else.

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Victor Frey · Answer 1

Answer: Option D

Explanation: In simple words, comparative advantage refers to a situation when one entity is able to produce a commodity at a lower opportunity cost or marginal cost than the other entity.

This simple means that the entity having advantage loosing less resources than the other entities while choosing to produce that relative commodity.

Thus, from the above we can conclude that the correct option is D.