Trade between nations is based on absolute advantage, which occurs when a country has a lower opportunity cost of producing a good.

Question

​Trade between nations is based on absolute advantage, which occurs when a country has a lower opportunity cost of producing a good.

Quizplus · Accepted Answer

Trade between nations is often based on comparative advantage, not absolute advantage. Comparative advantage occurs when a country can produce a good at a lower opportunity cost compared to other countries, not necessarily at a lower absolute cost.

​Trade Between Nations Is Based on Absolute Advantage, Which Occurs

Trade Between Nations Is Based on Absolute Advantage, Which Occurs