Use the following statements to answer this question. I. A nation may have a comparative advantage in the production of a good without having an absolute advantage in the production of any goods.
II) A nation may have a comparative advantage in the production of two or more goods.
A) Both I and II are true.
B) I is true, and II is false.
C) I is false, and II is true.
D) Both I and II are false.

Question

Quizplus · Accepted Answer

Comparative advantage exists when a country can produce a good at a lower opportunity cost than another, not necessarily at a higher absolute efficiency. A nation cannot have a comparative advantage in the production of all goods simultaneously because comparative advantage is relative between two countries or goods.

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