When comparing two countries with two goods each, if one country has a comparative advantage in one good, the other country will have a comparative advantage in the other good.

Question

Quizplus · Accepted Answer

This statement is based on the theory of comparative advantage, which states that countries can benefit from trade by focusing on producing goods for which they have a relatively lower opportunity cost compared to other countries. If one country has a comparative advantage in producing one good, it must have a relatively higher opportunity cost in producing the other good. Therefore, the other country will have a comparative advantage in producing the second good.

When Comparing Two Countries with Two Goods Each, If One