Mutually beneficial trade will occur between two countries for all of the following reasons except one.Which is the exception?

Question

Quizplus · Accepted Answer

Absolute advantage alone does not necessarily ensure mutually beneficial trade. If one country has an absolute advantage in producing both goods, then there is no incentive for the other country to trade as it cannot provide anything that the first country cannot produce more efficiently. Therefore, trade will only be mutually beneficial when there is a comparative advantage for both countries in producing different goods.

Mutually Beneficial Trade Will Occur Between Two Countries for All