X Has a Comparative Advantage Over Y in Producing a Good

question 2

Multiple Choice

X has a comparative advantage over Y in producing a good if

• A) X can produce more of the good than Y can in a given time period.
• B) X has to trade off more than Y does to produce the good.
• C) X has a lower opportunity cost of producing the good than does Y.
• D) X has a higher opportunity cost of producing the good than does Y.
• E) Y can produce more of the good than X can in a given time period.

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Definitions:

Absolute Advantage

A condition where a country, entity, or individual can produce a good or service more efficiently than competitors using the same amount of resources.

Comparative Advantage

The ability of an individual, firm, or country to produce a good or service at a lower opportunity cost compared to others.

Minutes

Units of time equal to one-sixtieth of an hour or 60 seconds, often used to measure the duration of events or periods of time.

Comparative Advantage

Comparative advantage occurs when one entity can produce a good or service at a lower opportunity cost than another, leading to more efficient trade possibilities.