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The Chinese have a comparative advantage in shirt manufacturing, as they have the lowest opportunity cost (1/2 bicycle) in that good. Likewise, the Italians have a comparative advantage in bicycle manufacturing as they have the lowest opportunity cost (5/3 shirts) in that good. Comparative advantage in international trade kf8 download Comparative advantage is an economic term that refers to an economy's ability to produce goods and services at a lower opportunity cost than that of trade partners. download The law or principle of comparative advantage holds that under free trade, an agent will produce more of and consume less of a good for which they have a comparative advantage. Comparative advantage is the economic reality describing the work gains from trade for individuals, firms, or nations, which arise from differences in their factor endowments or technological progress. The Voyages of Captain James Cook Round the World: Comprehending a ... 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