Comparative Advantage: Definition and Examples


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question 1 of 3

Country A can either produce 10 cars or 10 computers, while country B can produce either 4 cars or 8 computers.

Based on this information, which of the following statements is FALSE?

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1. If Sally can produce 1 term paper or 4 cookies in one hour, and Adam can produce 2 term papers or 1 cookie in the same amount of time, which of these statements is true?

2. Which of the following are problems that all economies face?

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About This Quiz & Worksheet

In business or in trade, you will be more successful if you have a comparative advantage over your competitors. This quiz and accompanying worksheet provide practice questions that assess your ability to understand the concept of comparative advantage.

Quiz & Worksheet Goals

In this assessment you will be tested on your comprehension of:

  • What constitutes a comparative advantage
  • Determine who has a comparative advantage
  • How comparative advantage can help a country's economy

Skills Practiced

Through this assessment, you will practice the following skills:

  • Reading comprehension - ensure that you draw the most important information from the related lesson on the law of comparative advantage
  • Critical thinking - apply relevant concepts to examine information about economics in a different light
  • Problem solving - use acquired knowledge to solve comparative advantage practice problems
  • Knowledge application - use your knowledge to answer questions about comparative advantage

Additional Learning

Trade developed when people discovered that it was more economically feasible to get a product or service from somewhere else than to produce it themselves. Learn more about economics in the assessment Comparative Advantage: Definition and Examples . This assessment covers:

  • The law of comparative advantage
  • Economics
  • Opportunity cost
  • Trade
  • Specialization
  • Absolute advantage