Asked by joseph sciotto on May 09, 2024
Verified
In a two-nation, two-good world, if one nation is more efficient in producing both goods than the other nation, then the more-efficient nation cannot gain from trading with the other nation.
Efficient Nation
A country that utilizes its resources in the most productive way possible, maximizing output and welfare with minimal waste.
- Comprehend the uses and constraints of the principle of absolute advantage in commerce.
- Grasp the theory of comparative advantage and its relevance to global trading systems.
Verified Answer
SS
sakchhi sharmaMay 11, 2024
Final Answer :
False
Explanation :
According to the principle of comparative advantage, even if one nation is more efficient in producing both goods, it can still gain from trade by specializing in the good for which it has a greater relative efficiency and trading for the other good.
Learning Objectives
- Comprehend the uses and constraints of the principle of absolute advantage in commerce.
- Grasp the theory of comparative advantage and its relevance to global trading systems.
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