It is possible for the U.S. to gain from trade with Germany even if it takes U.S. workers fewer hours to produce every good than it takes German workers.

Question

Skylar Baker · Accepted Answer

Final Answer : True, Explanation :  This is possible due to the principle of comparative advantage, which suggests that even if one country is more efficient in producing all goods (absolute advantage), both countries can still benefit from trade if they specialize in producing goods for which they have the lowest opportunity cost.

It is possible for the U.S. to gain from trade with Germany even if it takes U.S. workers fewer hours to produce every good than it takes German workers.

Definitions

Learning Objectives

Learning Objectives

Related questions