The figure given below represents the PPC in two nations

Question

The figure given below represents the PPC in two nations - Germany and Korea, producing only two goods, cars and food.Figure 2.4
 
-Specialization and trade can take place only if a country is endowed with more of something compared to other countries.

Quizplus · Accepted Answer

Specialization and trade can occur even if a country does not have an absolute advantage in producing a particular good, but rather has a comparative advantage - meaning that it has a lower opportunity cost of producing that good compared to other goods. Therefore, trade can still be beneficial even if a country is not endowed with more of something compared to other countries.