Country's ability to produce a good or service at a lower cost per unit than any other country can produce it. T/F

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Business

Darion Norris

11 October, 02:20

Country's ability to produce a good or service at a lower cost per unit than any other country can produce it. T/F

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Sassafras · Answer 1

True.

Explanation:

Comparative advantage is the ability of the country in producing the particular goods ara lower cost that it specializes with. And thus has a relative opportunity or advantage in that product or service. There tend to rise from the factor endowment and the progress in technology. This is a classical theory given by David Ricardo who developed his theory in 1817 as to why the countries engage in international trade and demonstrated that the two countries have two distinct products as they have distinct labor productivity.