Comparative advantage is the ability of a person or nation to produce a good at lower opportunity cost than the other. For example if A and B planning to trade with each other. Both person produce wheat and rice. Opportunity cost of producing wheat for A is $2/kg and that of B is $1/kg. Similarly the opportunity cost of producing rice for the person A is $1.5/kg and that of person B is $3/kg. Here A has a lower opportunity cost in the production of Rice than B and B has lower opportunity cost in the prod ... See the full answer