Which of the following statements is always true?
A) Comparative advantage implies absolute advantage.
B) Absolute advantage implies comparative advantage.
C) Comparative advantage does not require absolute advantage.
D) Absolute advantage requires comparative advantage.
E) Comparative advantage requires absolute advantagE.

Question

Quizplus · Accepted Answer

Comparative advantage means being able to produce a good or service at a lower opportunity cost than another country. Absolute advantage means being able to produce more of a good or service with the same amount of resources than another country. Comparative advantage does not require absolute advantage, as a country may have a lower opportunity cost in producing a good or service even if it cannot produce as much as another country with the same resources.

Which of the Following Statements Is Always True