If a country produces only two goods, it is possible to have a comparative advantage in the production of both those goods.

Question

Quizplus · Accepted Answer

According to the principle of comparative advantage, a country cannot have a comparative advantage in the production of two goods simultaneously as resources and factors of production are limited. A country can only have a comparative advantage in the production of one good and import the other from another country with a comparative advantage in its production.

If a Country Produces Only Two Goods, It Is Possible