Trade occurs when a country has an absolute advantage and not just a comparative advantage over another country.

Question

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Trade can occur even if a country does not have an absolute advantage over another country but has a comparative advantage in producing certain goods or services. Comparative advantage means that a country can produce a good or service at a lower opportunity cost than another country. This allows both countries to benefit from trading goods or services with each other.

Trade Occurs When a Country Has an Absolute Advantage and Not