If Indiana has an absolute advantage over Maine in producing both corn and ball bearings,then

Question

Quizplus · Accepted Answer

Although Indiana has an absolute advantage in producing both corn and ball bearings, it may still be more beneficial for both states to specialize in producing the good in which they have a comparative advantage. Comparative advantage takes into consideration the opportunity cost of producing each good, meaning the goods that each state gives up producing in order to produce the good they are specializing in. Therefore, more information is needed to determine which state has a comparative advantage in each good, and which goods they should specialize in producing.

If Indiana Has an Absolute Advantage Over Maine in Producing