The principle of absolute advantage asserts that mutually beneficial trade can occur even if one nation is absolutely more efficient in the production of all goods.

Question

Quizplus · Accepted Answer

The principle of absolute advantage suggests that mutually beneficial trade can occur when different nations have absolute advantages in producing different goods. It does not support the idea of beneficial trade if one nation is more efficient in all goods; that concept is addressed by the principle of comparative advantage.

The Principle of Absolute Advantage Asserts That Mutually Beneficial Trade