Asked by Ghefhine Casilao on May 30, 2024
Verified
For any pair of nations and goods, if each country has an absolute advantage in the production of one product, it is reasonable to expect that specialization and trade will benefit both countries.
Absolute Advantage
The ability of an individual, company, or country to produce a good or service more efficiently than competitors.
Specialization
The process of focusing on and becoming expert in a particular subject or skill, often resulting in increased efficiency and productivity.
Nations
Large groups of people united by common descent, history, culture, or language, inhabiting a particular country or territory.
- Comprehend the theories of absolute and comparative advantage in international commerce.
Verified Answer
MF
Miguel FortunaJun 01, 2024
Final Answer :
True
Explanation :
When each country specializes in the production of the good in which it has an absolute advantage and then trades with the other, both countries can end up with more of both goods than they would have been able to produce on their own, thus benefiting from the trade.
Learning Objectives
- Comprehend the theories of absolute and comparative advantage in international commerce.