A country that has an absolute advantage in producing all goods will
A) have a comparative advantage in some goods but not all.
B) produce all goods at lowest opportunity cost.
C) have a comparative advantage in all goods.
D) not gain from specialization and trade.

Question

Quizplus · Accepted Answer

A country with an absolute advantage in all goods will still have a comparative advantage in some goods but not all, because comparative advantage is about which goods the country can produce at a lower opportunity cost relative to others. Absolute advantage means a country can produce more of a good using the same amount of resources, but comparative advantage focuses on the opportunity cost of producing one good over another.

A Country That Has an Absolute Advantage in Producing All