If there are two goods and two countries,then one country can have
A)an absolute advantage in both goods but a comparative advantage in only one good.
B)an absolute advantage in both goods and a comparative advantage in both goods.
C)an absolute advantage in one good,an absolute disadvantage in the other good,and a comparative advantage in neither.
D)an absolute advantage in neither good and a comparative advantage in both goods.

Question

Quizplus · Accepted Answer

Absolute advantage refers to a country's ability to produce a good with fewer resources than another country, while comparative advantage refers to a country's ability to produce a good at a lower opportunity cost than another country. It is possible for a country to have an absolute advantage in both goods but a comparative advantage in only one good, which means that the country can produce both goods more efficiently than the other country but should specialize in producing and exporting the good in which it has a lower opportunity cost.

If There Are Two Goods and Two Countries,then One Country