A nation must have an absolute advantage in order to have a comparative advantage in producing a good or service.

Question

Quizplus · Accepted Answer

A nation can have a comparative advantage in producing a good or service even if it does not have an absolute advantage. Comparative advantage is based on the opportunity cost of producing a good or service, while absolute advantage is based on the ability to produce more of a good or service with the same amount of resources.

A Nation Must Have an Absolute Advantage in Order to Have