If Country A can produce a good at a lower opportunity cost than Country B can,
A)there are benefits from trade
B)Country A has an absolute advantage in producing the good
C)economic efficiency has been achieved
D)Country A does not have a comparative advantage in producing the good
E)Country A can sell the good for a higher price abroad

Question

Quizplus · Accepted Answer

If Country A can produce a good at a lower opportunity cost than Country B can, then there are benefits from trade. This is because Country A has a comparative advantage in producing that good, and can therefore produce it at a lower opportunity cost than Country B. By trading with each other, both countries can specialize in producing the good in which they have a comparative advantage, and consequently enjoy higher levels of economic efficiency and overall welfare.

If Country a Can Produce a Good at a Lower