Asked by Nyasia Green on May 18, 2024

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If country A has a higher opportunity cost in producing good X than does country B,then we know that

A) country B has an absolute advantage in the production of product X.
B) country B has a comparative advantage in the production of product X.
C) country A has an absolute advantage in the production of product X.
D) country A has a comparative advantage in the production of product X.

Higher Opportunity Cost

The increased potential loss of choosing one option over another, indicating a sacrifice of higher value alternatives.

Absolute Advantage

The ability of a country, individual, company or region to produce a good or service at a lower cost per unit than the cost at which any other entity produces that good or service.

Comparative Advantage

The capacity of a nation, person, business, or area to generate a product or offer a service with a smaller opportunity cost compared to its rivals.

  • Dissect the principles of comparative and absolute advantage relevant to trade dynamics.
  • Perceive the contribution of opportunity costs to the development of trading bonds.
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SP
Simon PannettMay 24, 2024
Final Answer :
B
Explanation :
Comparative advantage exists when a country can produce a good at a lower opportunity cost than another country. Since country A has a higher opportunity cost in producing good X than country B, country B has a comparative advantage in producing good X.