Comparative Advantage in Economics

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What does it mean when a nation has a comparative advantage in the production of a good or service?

It has less opportunity cost (correct)

It gives up fewer resources

It has more opportunity cost

It gives up more resources

How does having a comparative advantage affect resource allocation in an economy?

Does not impact resource allocation

Makes the economy more efficient in allocating resources (correct)

Increases costs for the production of goods

Decreases efficiency in resource usage

Which of the following is a result of a nation having a comparative advantage over another nation?

Reduced efficiency in resource usage

Decreased opportunity cost (correct)

Increased costs for the production of goods

More resources given up for production

If a nation gives up fewer resources to produce something compared to another nation, what does this imply about its comparative advantage?

It is more efficient in resource usage Signup and view all the answers

Why does having a comparative advantage make an economy more efficient in its allocation of resources?

By decreasing resource wastage in production Signup and view all the answers

What does it mean when a nation has a comparative advantage in the production of a good or service?

It can produce that good at a lower opportunity cost than other nations. Signup and view all the answers

How does having a comparative advantage impact resource usage in a nation?

It leads to a more efficient use of resources. Signup and view all the answers

What is the primary benefit of a nation having a comparative advantage over another nation?

More efficient allocation of resources and decreased production costs. Signup and view all the answers

In the context of comparative advantage, what does 'opportunity cost' refer to?

The value of the next best alternative that is foregone. Signup and view all the answers

How does having a comparative advantage impact the overall efficiency of an economy's resource allocation?

It enhances the overall efficiency of the economy's resource allocation. Signup and view all the answers

Comparative Advantage in Economics

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Questions and Answers

What does it mean when a nation has a comparative advantage in the production of a good or service?

How does having a comparative advantage affect resource allocation in an economy?

Which of the following is a result of a nation having a comparative advantage over another nation?

If a nation gives up fewer resources to produce something compared to another nation, what does this imply about its comparative advantage?

Why does having a comparative advantage make an economy more efficient in its allocation of resources?

What does it mean when a nation has a comparative advantage in the production of a good or service?

How does having a comparative advantage impact resource usage in a nation?

What is the primary benefit of a nation having a comparative advantage over another nation?

In the context of comparative advantage, what does 'opportunity cost' refer to?

How does having a comparative advantage impact the overall efficiency of an economy's resource allocation?

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