If one person has an absolute advantage in producing two goods, then that person _____

Question

Quizplus · Accepted Answer

Having an absolute advantage in producing two goods means that the person can produce more of both the goods than another person in the same amount of time. However, comparative advantage is determined by the opportunity cost of producing one good in terms of the other. Therefore, it is possible for the person with the absolute advantage to have a lower opportunity cost of producing one good than the other person, leading to a comparative advantage in producing only one good.

If One Person Has an Absolute Advantage in Producing Two