Question

Assume that in an isolated village each household specializes in the production of the good in which they enjoy a comparative advantage. It follows that each household specializes in the production of the good for which the opportunity cost of production is ___________.

Answer 1

Answer: low

Explanation:

When countries produce the goods that they have comparative advantage in, this implies that they will not produce the goods that they have the opportunity cost to be high.

In this case, they'll produce the products that they have low opportunity cost. The opportunity cost simply means the cost of what they'll forgo.