Which of the following is a source of comparative advantage?

• A. Differences in technology between countries
• B. Uniform access to all resources
• C. Equal productivity levels in all industries
• D. Identical opportunity costs across all producers

Answer: (A)

Verified step by step guidance

1. Understand the concept of comparative advantage: it occurs when a country or producer can produce a good at a lower opportunity cost compared to others.
2. Recognize that comparative advantage arises from differences in opportunity costs, which are influenced by factors such as technology, resource availability, and productivity.
3. Analyze each option to see if it creates differences in opportunity costs: 'Differences in technology between countries' can lead to different productivity levels and thus different opportunity costs.
4. 'Uniform access to all resources', 'Equal productivity levels in all industries', and 'Identical opportunity costs across all producers' imply no differences in opportunity costs, so they do not create comparative advantage.
5. Conclude that the source of comparative advantage is the factor that causes differences in opportunity costs, which in this case is 'Differences in technology between countries'.