Countries can have a(n) _____ even if they do not have a(n)
a) comparative advantage; absolute advantage.
b) absolute advantage; production possibility curve.
c) absolute advantage; labor efficiency.
d) comparative advantage; labor efficiency.

Question

Countries can have a(n) _____ even if they do not have a(n)
a)    comparative advantage; absolute advantage.
b)    absolute advantage; production possibility curve.
c)    absolute advantage; labor efficiency.
d)    comparative advantage; labor efficiency.

BlackTom AI · Accepted Answer

First, I’ll restate the question and the answer options to anchor what we’re evaluating.
Question: Countries can have a(n) _____ even if they do not have a(n) absolute advantage.
Options: A) comparative advantage; absolute advantage. B) absolute advantage; production possibility curve. C) absolute advantage; labor efficiency. D) comparative advantage; labor efficiency.
Now, analyze each option one by one.
Option A: comparative advantage; absolute advantage. This aligns with economic theory: a country can have a comparative advantage in producing a good if its opportunity cost is lower than that of the other country, even if it lacks absolute (overall) efficiency. The key idea is relative efficiency, not overall maximum output. So this option correctly captures the concept that comparative advantage can exist without absolute advantage.
Option B: absolute advantage; production possibility curve. An absolute advantage refers to being able to produce more of a good with the same resources, which is a statement about efficiency, not about having or not having an absolute advantage. The production possibility curve (PPC) is a tool illustrating trade-offs and opportunity costs, and it is not something a country “has” or “not have” as a feature like an advantage. This pairing conflates a concept (absolute advantage) with a diagram (PPC) in a way that doesn’t address the stated relationship, making it incorrect.
Option C: absolute advantage; labor efficiency. This suggests that a country can have an absolute advantage and yet still has some condition about labor efficiency as the defining feature of what they lack, which is illogically mixing terms. If a country had an absolute advantage, it would imply higher efficiency in production, including labor, so the structure of the statement doesn’t reflect the typical relationship described in the question. It also incorrectly implies a scenario where absolute advantage is present; the question asks about lacking absolute advantage.
Option D: comparative advantage; labor efficiency. While comparative advantage depends on relative opportunity costs and can exist without an absolute advantage, the pairing with "labor efficiency" isn’t the standard way to describe the concept, and the question’s phrasing points toward the canonical pairing in trade theory: one can have comparative advantage without absolute advantage. The inclusion of “labor efficiency” as the missing piece makes this option less precise and somewhat misleading compared to Option A.
Finally, comparing all options, Option A best matches the fundamental trade theory: a country can have comparative advantage without possessing absolute advantage, whereas the other options either mix concepts incorrectly or rely on unclear pairings of terms. This supports A as the correct choice, given the standard definitions of comparative and absolute advantages and their relationship to production capabilities and opportunity costs.

ECON:3345:0001 Spr25 Quiz 1, Chapters 1-3

Countries can have a(n) _____ even if they do not have a(n) a) comparative advantage; absolute advantage. b) absolute advantage; production possibility curve. c) absolute advantage; labor efficiency. d) comparative advantage; labor efficiency.

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