A nation having absolute disadvantages in the production of two goods with respect to another nation has a/an ______ _____ in the production of the good in which its absolute disadvantage is less.

Question

Quizplus · Accepted Answer

Absolute disadvantage means that a nation cannot produce a good more efficiently than another nation. However, a nation can still have a comparative advantage in producing a good if it has a lower opportunity cost of producing that good compared to the other nation. Therefore, a nation with absolute disadvantages in the production of two goods would still have a comparative advantage in the production of the good in which its absolute disadvantage is less.

A Nation Having Absolute Disadvantages in the Production of Two