A country that is half as productive at producing some goods as another country, but is one quarter as productive at producing others, will not be able to gain from trade.

Question

Quizplus · Accepted Answer

Even though the country may be half as productive in some areas and a quarter as productive in others, it may still have a comparative advantage in producing some goods. It can specialize in producing those goods where it has a comparative advantage and trade with the other country to gain from trade.

A Country That Is Half as Productive at Producing Some