Asked by
David Fuentes
on Dec 17, 2024Verified
Unless two people who are producing two goods have exactly the same opportunity costs, then one person will have a comparative advantage in one good, and the other person will have a comparative advantage in the other good.
Comparative Advantage
The ability of an entity to produce a good or service at a lower opportunity cost than others.
Opportunity Costs
The cost of forgoing the next best alternative when choosing among multiple options, measuring the trade-off involved in any decision.
- Differentiate the principles of absolute and comparative advantage in international trade scenarios.
- Comprehend the role that specialization and comparative advantage play in facilitating interdependence among individuals and countries.
Verified Answer
JG
Learning Objectives
- Differentiate the principles of absolute and comparative advantage in international trade scenarios.
- Comprehend the role that specialization and comparative advantage play in facilitating interdependence among individuals and countries.