In a two-nation, two-good world, it is possible for one nation to have the comparative advantage in
both goods.

Question

Quizplus · Accepted Answer

According to the principle of comparative advantage, a country has a comparative advantage in producing a good if it can produce that good at a lower opportunity cost than its trading partner. Therefore, it is not possible for one nation to have a comparative advantage in both goods, as it would imply that the opportunity cost of producing both goods is lower in one country than in the other, which would violate the principles of comparative advantage.

In a Two-Nation, Two-Good World, It Is Possible for One