If a country has an absolute advantage in the production of both goods, then it is better off producing them both rather than producing only one good and trading with another country. True or False. Explain.

Question

Quizplus · Accepted Answer

Even if a country has an absolute advantage in the production of all goods, it will still have a comparative advantage in the production of only some goods. Comparative advantage looks at the opportunity cost of producing one good over the other in a particular country. The country with the comparative advantage has the lowest opportunity cost.

If a Country Has an Absolute Advantage in the Production