For two people who are planning to trade two different goods, when will there NOT be a comparative advantage for either?
A) if they have exactly the same opportunity cost
B) if they have agreed in advance on who will produce what and how much each will produce
C) if the terms of trade are such that neither can gain from trade
D) if one person has an absolute advantage in both products

Question

Quizplus · Accepted Answer

Comparative advantage arises from differences in opportunity costs between two individuals or countries. If they have exactly the same opportunity cost, then there is no advantage for either party to specialize in one good over another.

For Two People Who Are Planning to Trade Two Different