Question

2.  

​A country can have a comparative advantage in the production of a good, even if it does not have an absolute advantage in the production of that good. a. True b. False

Answer 1

a. True

Let there are two countries A and B such that,

With one hour of labour, A can produce 2 units of wine or 3 units of pen.

With one hour of labour, B can produce 5 units of wine or 4 units of pen.

Now we can see , country A does not have absolute advantage in any of good's production. But it has comparative advantge in production of pen.

Answer 2

A. True.

Yes, a country can have a comparative advantage in production of a good even if it doesn't have absolute advantage in production of any good.

For Example

Country	Food (Labour hour)	Clothes
A	1	2
B	2	6

Country A requires 1 labour hour to produce one unit of food and 2 Labour hour to produce one unit of cloth and Country B requires 2 labour hour to produce one unit of food and 6 labour hour to produce one unit of cloth. Country A has an absolute advantage in production of both the goods. But Country B has lesser opportunity cost of production of food I. e, 1/3(2/6) as compared to 1/2(2/4) therefore country B has comparative advantage in production of food.

All the best. ::))