Question

If a country has a comparative advantage in the production of a good, then its resources are better suited to the production of that good than the resources of other countries.

Group of answer choices

True

False

Answer 1

True.

If we talk in simple terms then a country said to have comparititive advantage over other country if it produces any goods or services at a lower opportunity cost as compared to other nations

Opportunity cost is the ratio of what we give up to the what we gain

It is also represented on production possibility Frontier

Hence if a country is having comparative advantage then its resources can be better utilised as compared to other country so that opportunity cost can be minimised