The Concept of Comparative Advantage Opportunity Cost The opportunity cost of roses in terms of computers is the number of computers that could be produced with the same resources as a given number of roses Comparative Advantage A country has a comparative advantage in producing a goods if the opportunity cost of producing that goods in terms of other goods is lower in that country than it is in other countries Copyright C 2003 Pearson Education, Inc Slide 1-5Copyright © 2003 Pearson Education, Inc. Slide 1-5 ▪ Opportunity Cost • The opportunity cost of roses in terms of computers is the number of computers that could be produced with the same resources as a given number of roses. ▪ Comparative Advantage • A country has a comparative advantage in producing a goods if the opportunity cost of producing that goods in terms of other goods is lower in that country than it is in other countries. The Concept of Comparative Advantage