When a country has a comparative advantage in the production of a good, it means that it can produce this good at a lower opportunity cost than its trading partner. Then the country will specialize in the production of this good and trade it for other goods. The following graphs show the production possibilities frontiers (PPFs) for Freedonia and Sylvania. Both countries produce lemons and sugar, each initially (i.e., before specialization and trade) producing 12 million pounds of lemons and 6 million pounds of sugar, as indicated by the grey stars marked with the letter A.

When a country has a comparative advantage in the production of a good, it means that it can produce this good at a lower opportunity cost than its trading partner. Then the country will specialize in the production of this good and trade it for other goods. The following graphs show the production possibilities frontiers (PPFs) for Freedonia and Sylvania. Both countries produce lemons and sugar, each initially (i.e., before specialization and trade) producing 12 million pounds of lemons and 6 million pounds of sugar, as indicated by the grey stars marked with the letter A.

 

 

Answer:

comparative advantage is production of good at lower opportnity cost and trade with cother country that product in exchange of some other so that both partner countries can be betteroff with the trade.

Asked on February 14, 2018 in economics.
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