Final answer:
The concept of gains from trade does not rely solely on differences in tastes or abilities, but rather on the principles of comparative and absolute advantage.
Step-by-step explanation:
The statement that in order for there to be a gain from trade, there has to be a difference in either tastes or abilities is false. To understand the benefits of trade, we must dive into the concepts of comparative and absolute advantage. Comparative advantage is the ability of a party to produce a particular good or service at a lower marginal and opportunity cost over another, while absolute advantage refers to the ability to produce more of a good or service with the same amount of resources compared to others.
Even if one country has an absolute advantage in everything, it can still gain from trade by specializing in goods for which it has a comparative advantage. This specialization allows for greater overall efficiency and maximizes the potential gain from trade. Moreover, the variety of products, improved competition, and transferred knowledge across borders are additional, often unmeasured, benefits of international trade.