Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Country A can produce both wheat and cloth more efficiently than Country B, but Country B can produce wheat at a lower opportunity cost.
B
Country A produces wheat and cloth equally well as Country B.
C
Country A has more resources than Country B, allowing it to produce more of both goods.
D
Country A focuses solely on producing cloth, while Country B only produces wheat.
Understanding the Answer
Let's break down why this is correct
Answer
Comparative advantage is when a person or country can produce a good or service at a lower opportunity cost than others. For example, imagine two friends, Alice and Bob. Alice is great at baking cookies and also good at mowing lawns, while Bob is excellent at mowing lawns but not as good at baking. If Alice focuses on baking cookies and Bob focuses on mowing lawns, they can trade cookies for lawn mowing services, allowing both to enjoy more cookies and a well-mowed lawn than if they each tried to do both tasks. This shows that by specializing in what they do best, they can both benefit more than if they worked alone.
Detailed Explanation
Country B can produce wheat with less sacrifice than Country A. Other options are incorrect because This option suggests both countries are equally good at making wheat and cloth; Having more resources does not mean a country has a comparative advantage.
Key Concepts
Comparative advantage
Topic
Absolute and Comparative Advantage
Difficulty
easy level question
Cognitive Level
understand
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