If country A can produce both goods X and Y more efficiently, that is, with smaller absolute amounts of resources, than can country B,

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Quizplus · Accepted Answer

The concept of comparative advantage explains that even if one country can produce all goods more efficiently than another, there can still be a basis for mutual trade. This is because the countries can benefit from specializing in the production of goods for which they have the greatest relative efficiency or the smallest relative inefficiency, and then trading.

If Country a Can Produce Both Goods X and Y