Comparative and Absolute Advantage Quiz
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Questions and Answers

If country A can produce coffee at a lower opportunity cost than country B, what does this indicate about country A?

  • Country A has an absolute advantage in the production of coffee. (correct)
  • Country A has a comparative advantage in the production of tea.
  • Country A has a comparative advantage in the production of coffee.
  • Country A has an absolute advantage in the production of tea.

    • In the scenario where country A can produce coffee at a lower opportunity cost, what can be said about country B?

  • Country B has no advantage in producing any goods.
  • Country B has a comparative advantage in the production of coffee. (correct)
  • Country B has a comparative advantage in the production of tea.
  • Country B has an absolute advantage in the production of coffee.

    • Which statement accurately describes the relationship between opportunity cost and comparative advantage in this context?

  • Opportunity cost is only relevant to absolute advantage.
  • A lower opportunity cost implies comparative advantage. (correct)
  • Opportunity cost is not related to comparative advantage.
  • A higher opportunity cost implies absolute advantage.

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