In a two-good,two country world,if one country has an absolute advantage in the production of both goods,it can still benefit by trading with the other country.

Question

Quizplus · Accepted Answer

Even if one country has an absolute advantage in the production of both goods, there is still room for gains from trade. This is because each country still has a comparative advantage in one of the goods, which means that they can specialize in producing that good and trade for the other good, leading to increased efficiency and overall welfare gains for both countries.

In a Two-Good,two Country World,if One Country Has an Absolute