Assume that the United States could produce all products at a lower per unit cost compared to Canada.If this were the case,

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Quizplus · Accepted Answer

Even if the United States has a lower per unit cost of production for all products, Canada can still have a comparative advantage in the production of some products, which means Canada can produce those products at a lower opportunity cost. As a result, Canada can specialize in producing those products and trade with the United States for other goods in which the United States has a comparative advantage. Therefore, Canada can still have a comparative advantage in trade for some products. Option A is incorrect because absolute advantage is based on who can produce a good with fewer resources, and it is possible that Canada can produce some goods with fewer resources. Option B is incorrect because comparative advantage is based on opportunity cost, not just the per unit cost of production. Option D is incorrect because it assumes Canada has a comparative advantage in all products, which is unlikely to be true.

Assume That the United States Could Produce All Products at a Lower