A country must have absolute advantage in a good in order to have comparative advantage in that good.

Question

Quizplus · Accepted Answer

A country can have comparative advantage in a good even if it does not have absolute advantage. Comparative advantage is determined by the opportunity cost of producing a good, while absolute advantage is based on the ability to produce more of a good than another country using the same amount of resources. Therefore, a country can have a lower opportunity cost of producing a good compared to another country, leading to comparative advantage, even if it does not have the ability to produce more of that good than the other country.

A Country Must Have Absolute Advantage in a Good in Order