If a nation has no absolute advantage,then it
A)cannot gain from trade.
B)still gains from trade.
C)can only gain from trade if it raises its productivity levels.
D)can only gain from trade if it reduces wages paid.
E)can only gain from trade if it produces outside its production possibilities curve.

Question

Quizplus · Accepted Answer

Even if a nation does not have an absolute advantage in producing any goods or services, it can still benefit from trade by specializing in and exporting goods or services where it has a comparative advantage - when it can produce them at a lower opportunity cost than other nations. By importing goods or services in which other nations have a comparative advantage, the nation can consume more and increase its overall welfare.

If a Nation Has No Absolute Advantage,then It