Which statement is true?

Question

Quizplus · Accepted Answer

Comparative advantage and absolute advantage are not identical terms. A country can have a comparative advantage in producing a good or service if it can produce it at a lower opportunity cost than its trading partners, even if it does not have an absolute advantage (i.e. it is not the most efficient producer). The U.S. does not have a comparative advantage and an absolute advantage with all of its trading partners, as each country has different strengths and weaknesses in production. Trade can still take place even if each partner does not have an absolute advantage; it is the comparative advantage that determines the gains from trade.

Which Statement Is True