If one person has an absolute advantage in producing both of two goods,then that person:
A)must also have a comparative advantage in both goods.
B)cannot benefit from trade.
C)cannot have a comparative advantage in either good.
D)will have a comparative advantage in only one good.
E)should specialize in the production of both goods.

Question

Quizplus · Accepted Answer

Having an absolute advantage in producing both goods does not mean having a comparative advantage in both. Comparative advantage is about producing a good at a lower opportunity cost than others. It's possible for someone to have an absolute advantage in both goods but only a comparative advantage in one, because comparative advantage is relative to the trade-offs between producing different goods.

If One Person Has an Absolute Advantage in Producing Both