If a nation has a comparative disadvantage in the production of some commodity, which of the following is most likely true?

• A. It has an absolute advantage in producing that commodity.
• B. Its opportunity cost of producing that commodity is higher than that of other nations.
• C. It can produce more of that commodity than any other nation using the same resources.
• D. It should specialize in the production of that commodity to maximize efficiency.

Answer: (B)

Verified step by step guidance

1. Understand the concept of comparative advantage: A nation has a comparative advantage in producing a good if it can produce that good at a lower opportunity cost compared to other nations.
2. Recognize what comparative disadvantage means: If a nation has a comparative disadvantage in producing a commodity, it means its opportunity cost of producing that commodity is higher than that of other nations.
3. Recall the definition of absolute advantage: A nation has an absolute advantage if it can produce more of a good using the same resources compared to others, which is different from comparative advantage.
4. Analyze the implications of comparative disadvantage: Since the opportunity cost is higher, the nation is less efficient at producing that commodity relative to others and should not specialize in it to maximize efficiency.
5. Conclude that the correct statement is: The nation’s opportunity cost of producing that commodity is higher than that of other nations, which aligns with the concept of comparative disadvantage.