Joe has an absolute advantage in producing goods X and Y compared to Ted.Moreover,they have the same opportunity costs.One can predict that the gains from coordinating production and specialization is
A) zero.
B) small.
C) large.
D) negative.
E) indeterminatE.

Question

Quizplus · Accepted Answer

Since Joe has an absolute advantage in both goods and they have the same opportunity costs, there are no gains from specialization, as neither can produce one good at a lower opportunity cost than the other.

Joe Has an Absolute Advantage in Producing Goods X and Y