If there are two goods and two countries, then one country can have both an absolute and a comparative advantage in both goods.

Question

Quizplus · Accepted Answer

If one country has an absolute advantage in one good, then it cannot have an absolute advantage in the other good. Additionally, if one country has a comparative advantage in one good, then the other country must have a comparative advantage in the other good due to the principle of opportunity cost. Therefore, one country cannot have both an absolute and a comparative advantage in both goods.

If There Are Two Goods and Two Countries, Then One