True or False: Absolute Advantage Exists Only When One Country Can Produce a Good at a Lower Opportunity Cost Than Another Country

Answer: False

Absolute advantage refers to the ability of a country to produce a good more efficiently than another country, meaning it can produce the good using fewer resources or in less time. This concept is separate from opportunity cost, which relates to the trade-offs one makes when choosing to produce one good over another. A country can have an absolute advantage in producing a good even if its opportunity cost isn’t necessarily lower than that of another country. Therefore, the statement is false.