When one country can produce a given amount of a good using fewer inputs than any other country,
A)It has an absolute advantage in producing the good.
B)It always has a comparative advantage in producing the good.
C)Specialization will definitely increase worldwide consumption possibilities.
D)Specialization will definitely increase worldwide production possibilities.

Question

Quizplus · Accepted Answer

The country has an absolute advantage in producing the good because it can produce the same amount using fewer resources. Comparative advantage, on the other hand, depends on the opportunity cost of producing one good over another in terms of alternative goods that could be produced. The given information does not provide enough information to determine comparative advantage. Specialization may increase consumption and production possibilities, but it cannot be definitively stated based on the given information.

When One Country Can Produce a Given Amount of a Good