Switzerland has comparative advantage in watches Explanation:that a country can produce a good or service at a lower opportunity cost than another country.Comparative advantage is a term used in international trade. It refers to the ability of a country to produce a good or service at a lower opportunity cost than another country. The concept of comparative advantage is used to explain why countries trade with each other.Comparative advantage is based on the idea of opportunity cost. Opportunity cost is the cost of something in terms of the next best alternative. For example, if you have an hour to spend and you can either watch a movie or read a book, the opportunity cost of watching a movie is the time you could have spent reading a book.In the context of international trade, the opportunity cost of producing a good or service is the cost of producing that good or service in terms of the next best alternative. For example, if it takes one hour to produce a widget, the opportunity cost of producing a widget is the time that could have been spent producing something else.The concept of comparative advantage is used to explain why countries trade with each other. It is based on the idea that countries can produce goods and services at different opportunity costs. For example, Country A may have a comparative advantage in the production of widgets. This means that it can produce widgets at a lower opportunity cost than Country B. As a result, Country A will export widgets to Country B in exchange for something that Country B produces at a lower opportunity cost than Country A.The concept of comparative advantage is important because it helps to explain why trade is beneficial for both countries. When countries trade, they are able to produce more goods and services than they could if they were not trading. This is because each country can specialize in the production of the goods and services that it can produce at a lower opportunity cost. As a result, both countries are better off.