If a country has a comparative advantage in the production of a good over another country, this means that it has the ability to produce the good:

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Study for the University of Central Florida ECO2023 Principles of Microeconomics Final. Prepare with multiple choice questions, flashcards with helpful hints and explanations. Ace your exam!

When a country has a comparative advantage in the production of a good, it signifies that the country can produce that good at a lower opportunity cost compared to another country. Opportunity cost refers to the value of the next best alternative that must be forgone when making a decision to produce one good over another.

By having a lower opportunity cost, the country is able to allocate its resources in a way that maximizes productivity and efficiency. This means that when it chooses to produce a particular good, it sacrifices less of other goods compared to another country that does not have such an advantage. This principle underlies the benefits of trade between countries, as each country can specialize in producing goods for which it holds a comparative advantage, leading to greater overall efficiency and higher total output.

In contrast, producing a good using more resources or at a higher opportunity cost would not indicate a comparative advantage, as it would imply less efficient use of resources. Similarly, labor input considerations do not directly relate to the concept of comparative advantage unless they impact the opportunity costs in a meaningful way. Thus, the emphasis on lower opportunity cost is foundational to understanding why certain countries specialize in the production of particular goods.