Question

If a country has an absolute advantage in a good, must it also have a comparative advantage in that good? Why or why not?

Answer 1

The given statement is not true. A country is said to have absolute advantage in production of a good if it's productivity of that good is more than its opponent country ( that is, using same amount of resources, that country can produce more of a good than it's opponent country produces using that same amount of resources). So, a country can have absolute advantage in production of one or more than one goods.

But, a country that has absolute advantage in a good, may not have comparative advantage in production of that good, because comparative advantage depends on opportunity cost of producing a good. If that country's (suppose country A) opportunity cost of producing that good is lower than it's opponent country, then country A has comparative advantage in production of that good. A country can have higher productivity in production of more than one good but lower opportunity cost in production of one good only, and not necessarily in the good in which it has absolute advantage.