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?

  • 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?

    <p>It is more efficient in resource usage</p> Signup and view all the answers

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

    <p>By decreasing resource wastage in production</p> 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?

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

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

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

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

    <p>More efficient allocation of resources and decreased production costs.</p> Signup and view all the answers

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

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

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

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

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