Question

A country enjoys a comparative advantage over another country in producing oil when _______________.

• A. it has more oil than the other country.
• B. it can produce oil at a lower opportunity cost than the other country
• C. it does not need to import oil.
• D. it wants to export oil as much as it has

Answer 1

The correct option is B it can produce oil at a lower opportunity cost than the other country

Comparative advantage is a principal of trade in economics. When one country has comparative advantage over another country in producing a certain goods it means the opportunity cost of producing oil in the other country is much more higher. Basically, comparative advantage means that one country is more efficient at producing oil than another country.