Comparative advantage is having a lower opportunity cost. True or False

Question:- Comparative advantage is having a lower opportunity cost. True or False

Answer: The correct option is True.

They mention that Opportunity cost is defined as the real cost of the next best decision that is turned down once a decision has been made. In the context of global commerce, comparative advantage refers to the situation where a country can manufacture a product or deliver a service using lesser costs than other nations. This means that the country is less efficient compared to others in producing that specific good/service enabling the country to utilize its resources optimally. On a global EAC, nations can offer products and services in areas where they have a competitive edge and import products they do not have to produce themselves so that everyone benefits from free trade. Comparative advantage constitutes a major belief about trade between different countries since it is advantageous to all the parties involved.