A higher opportunity cost equals a greater comparative advantage. True or false?

Step 1: Define the Problem

Determine whether the statement "A higher opportunity cost equals a greater comparative advantage" is true or false.

Step 2: Break Down the Problem

• Understand the concept of opportunity cost.
• Understand the concept of comparative advantage.

Step 3: Apply Relevant Concepts

• Opportunity Cost: The cost of forgoing the next best alternative when making a decision.
• Comparative Advantage: The ability of an entity to produce a good or service at a lower opportunity cost than others.

Step 4: Analysis, Verify and Summarize

• Comparative advantage is determined by having a lower opportunity cost, not a higher one.
• Therefore, a higher opportunity cost would indicate a lesser comparative advantage.

Final Answer

False. A higher opportunity cost does not equal a greater comparative advantage; it indicates a lesser comparative advantage.