In the Classical (Ricardo) analysis,
A) if a country has an absolute advantage in a good, it also has a comparative advantage In the good.
B) if a country has a comparative advantage in a good, it cannot have an absolute Advantage in the good.
C) a country can have a comparative advantage in a good at the same time that it has an Absolute advantage in that good.
D) a country with an absolute advantage in all goods cannot gain from trade.

Question

Quizplus · Accepted Answer

According to the Classical (Ricardo) analysis, a country can have a comparative advantage in a good at the same time that it has an absolute advantage in that good. This implies that even if one country is more efficient in producing all goods compared to another country, both countries can still benefit from trade if they specialize in producing the goods in which they have a comparative advantage.

In the Classical (Ricardo) Analysis