Question

According to the principle of comparative advantage, when might it not be possible for two people to benefit from specializing and trading with one another?

a) When both have identical skill sets
b) When resources are unlimited
c) When there's no difference in opportunity costs
d) When preferences for goods are identical

Answer 1

c) When there's no difference in opportunity costs

According to the principle of comparative advantage, two people may not be able to benefit from specializing and trading when there's no difference in opportunity costs.

Step-by-step explanation:

According to the principle of comparative advantage, two people may not be able to benefit from specializing and trading with one another when there's no difference in opportunity costs. Comparative advantage is based on the idea that individuals or countries should specialize in the production of goods or services in which they have a lower opportunity cost. If both people have the same opportunity cost for producing a particular good, there is no incentive for them to specialize and trade because they could both produce the good with similar efficiency.