Which of the following statements is TRUE regarding comparative advantage and absolute advantage?
A)People can have a comparative advantage without having an absolute advantage in a task.
B)People can have a comparative advantage only if they also have an absolute advantage in a task.
C)People can have an absolute advantage only if they also have a comparative advantage in a task.
D)People can have no comparative and no absolute advantages in any of the tasks.

Question

Quizplus · Accepted Answer

Comparative advantage refers to the ability of a person or country to produce a good or service at a lower opportunity cost than another person or country, while absolute advantage refers to a person or country's ability to produce more of a good or service with the same amount of resources. Therefore, it is possible for someone to have a comparative advantage (producing at a lower opportunity cost) without having an absolute advantage (producing more with the same resources).

Which of the Following Statements Is TRUE Regarding Comparative Advantage