Comparative advantage refers to the ability of an individual, firm, or country to produce a good or service at a lower opportunity cost than another. In this context, the correct definition of comparative advantage is not aligned with producing more of a good or service (option a). Instead, it is focused on the ability to produce a good or service more efficiently relative to others.
To clarify:
- Option A: “The ability to produce more of a good or service than another over a specified time period” – This describes absolute advantage, not comparative advantage.
- Option B: “The ability to produce a good or service” – This definition is vague but aligns more closely with the concept of comparative advantage if it implies production at a lower opportunity cost.
In summary, comparative advantage emphasizes producing goods and services more efficiently relative to alternatives, rather than simply producing more of them.