When there is no comparative advantage between countries

Question

Quizplus · Accepted Answer

Comparative advantage is the ability of a country to produce a good or service at a lower opportunity cost than another country. When there is no comparative advantage, it means both countries have the same opportunity cost in producing a good or service. In this case, there are no gains from specialization and trade because both countries can produce the good or service at the same cost.

When There Is No Comparative Advantage Between Countries