If a country possesses the absolute advantage in the production of one good:
A)then it must also possess the absolute advantage in the production of the other good.
B)then it must also possess the comparative advantage in the production of that good.
C)then it must also possess the comparative advantage in the production of the other good.
D)it can produce more of that good given the same resources.

Question

Quizplus · Accepted Answer

Possessing absolute advantage in the production of one good means that the country can produce more of that good given the same resources. Therefore, the country can specialize in the production of that good and achieve higher productivity and efficiency. However, it does not necessarily mean that the country possesses comparative advantage in the production of that good or any other good. Comparative advantage takes into account the opportunity cost of producing one good in terms of foregone production of another good.

If a Country Possesses the Absolute Advantage in the Production