If a nation does not have an absolute advantage in producing anything, it
A)has no comparative advantage either.
B)will have a comparative advantage in the activity in which it is least inefficient.
C)will try to get along without trade.
D)will export raw materials and import finished products.

Question

Quizplus · Accepted Answer

Even if a nation does not have an absolute advantage in producing anything, it can still have a comparative advantage in the activity in which it is least inefficient. This means that it can produce a certain good or service more efficiently than another country, even if it cannot produce it with the same level of absolute efficiency as that country. Therefore, it can still benefit from trade by specializing in the activity in which it has a comparative advantage and trading with other countries. The other options (A, C, and D) are incorrect because they do not necessarily follow from the premise of not having an absolute advantage.

If a Nation Does Not Have an Absolute Advantage in Producing