00:01
So for the following question, we're to answer if the following statements are true or false and explain in each case.
00:08
The first one is two countries can achieve gained from trade, even if one of the countries has an absolute advantage in the production of all goods.
00:19
So for this one, it's true because even if one country has absolute advantage in production of all goods, the two countries can still benefit from trade as not.
00:30
Long as one country has a comparative advantage in the production of one good.
00:35
So the answer is true because the two countries can still benefit from trade as long as one country has a comparative advantage in producing one good.
01:35
So the second question, certain talented people have a comparative advantage in everything they do.
01:44
This is false because it is possible to have a comparative or absolute advantage in everything that you do, but as you become better at more things, the opportunity cost for doing other activities become higher as well, and comparative advantage comes from having a lower opportunity cost than trading partners.
02:06
So it is false because as you become better, add more things the opportunity cause for doing other activities become higher now moving on to this third question if a sudden trade is good for one person it can be good for the other person this is false because a silent trade can be good for one person and be good for the other person because trade only occurs when both parties are benefiting from the transaction by trading good that they have the comparative advantage in producing.
03:14
So trade only occurs when the both parties are benefiting.
03:34
The fourth one is if a certain trade is good for one person, it's always good for the other person...
