According to the Application,if Latvia has no absolute advantage relative to its neighboring European y countries,should it still trade with its neighbors?
A)Yes,it should specialize in timber because it has comparative advantage in it.
B)Yes,it should specialize in livestock because it has comparative advantage in it.
C)Yes,it should specialize in grain because it has comparative advantage in it.
D)No,it should not specialize in anything,and it should just trade with countries outside its neighboring European countries.

Question

Quizplus · Accepted Answer

Even if Latvia does not have an absolute advantage in any industry relative to its neighboring European countries, it can still have a comparative advantage in certain industries. In this case, if Latvia has a comparative advantage in producing timber over its neighbors, it should specialize in timber production and trade with its neighbors.

According to the Application,if Latvia Has No Absolute Advantage Relative