If it takes Australian workers fewer hours to produce every good than it takes Malaysian workers, Australia cannot gain from trade with Malaysia.

Question

Quizplus · Accepted Answer

Even if Australian workers can produce goods in fewer hours than Malaysian workers, there could still be benefits from trade with Malaysia, as they may have a comparative advantage in producing different goods. Comparative advantage is based on the opportunity cost of producing a good, not just the number of hours required to produce it. Therefore, both countries can benefit from trade by specializing in the production of the goods for which they have a comparative advantage, and then trading with each other.

If It Takes Australian Workers Fewer Hours to Produce Every