In a two-country, two-product world, if Australia has a comparative advantage over New Zealand in the production of grapes relative to kiwi fruit, which statement must be TRUE?

Question

Quizplus · Accepted Answer

In the context of comparative advantage, if Australia has a comparative advantage in producing grapes relative to kiwi fruit, it implies that New Zealand must have a comparative advantage in producing the other good, which is kiwi fruit, as comparative advantage is a relative measure indicating that a country can produce a good at a lower opportunity cost compared to another country.

In a Two-Country, Two-Product World, If Australia Has a Comparative