If two countries produce both wheat and sugar and one country has the comparative advantage in producing wheat then the other country must have the comparative advantage producing sugar.

Question

Quizplus · Accepted Answer

According to the principle of comparative advantage, if one country has a lower opportunity cost (in terms of alternative goods forgone) of producing a certain good than another country, then it has a comparative advantage in producing that good. If Country A has a lower opportunity cost of producing wheat than Country B, then Country B must have a lower opportunity cost of producing sugar than Country A. Therefore, Country B has a comparative advantage in producing sugar.

If Two Countries Produce Both Wheat and Sugar and One