If one country has an absolute advantage over another country in producing all goods, the countries will not gain from trading.

Question

Quizplus · Accepted Answer

Even if one country has an absolute advantage over another country in producing all goods, both countries can still gain from trading. This is because the country with the absolute advantage can focus on producing the goods it is most efficient at producing, while the other country can focus on producing the other goods. By trading, both countries can obtain more goods at a lower cost than if they were self-sufficient.

If One Country Has an Absolute Advantage Over Another Country