A person who has an absolute advantage in the production of all goods will
A) also have a comparative advantage in the production of all goods.
B) not be able to gain from specialization and exchange.
C) have a production possibilities frontier with a constant slope.
D) have a comparative advantage in the production of some goods but not in the production of others.

Question

Quizplus · Accepted Answer

Having an absolute advantage in the production of all goods does not necessarily mean having a comparative advantage in the production of all goods. Comparative advantage is determined by who has the lower opportunity cost in the production of a good. Therefore, a person with an absolute advantage in all goods can still have a comparative advantage in some goods but not others, allowing for beneficial trade and specialization based on comparative advantages.

A Person Who Has an Absolute Advantage in the Production