Learning Path
Question & Answer1
Understand Question2
Review Options3
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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 something at a lower opportunity cost than others. For example, imagine two friends, Alex and Jamie. Alex is great at making sandwiches and can also clean the house, but cleaning takes a lot of his time. Jamie, on the other hand, is not as good at making sandwiches, but can clean the house much faster than Alex. In this case, if Alex focuses on making sandwiches and Jamie on cleaning, they will both benefit more than if they each tried to do both tasks.
Detailed Explanation
This option shows that Country B can produce wheat with less sacrifice than Country A. Other options are incorrect because This option suggests both countries are equal; Having more resources does not mean a country has an advantage.
Key Concepts
Comparative advantage
Topic
Absolute and Comparative Advantage
Difficulty
easy level question
Cognitive Level
understand
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