Final answer:
The statement provided is false; countries benefit from trade by specializing and trading based on their comparative advantage, not just absolute advantage. Even if one country has an absolute advantage in all production, trade can still be beneficial by focusing on areas of comparative advantage, allowing for higher global consumption.
Step-by-step explanation:
Absolute advantage is a classical theory in economics; however, the statement is false when it suggests that countries should only produce goods they can make more cheaply than others. In reality, even if a country has an absolute advantage in producing all goods, there can still be gains from trade by specializing in goods where they have a comparative advantage.
For instance, high-income countries, with advanced technology and skilled workers, may produce everything more efficiently than low-income countries. Yet, trade is advantageous when countries focus on goods that they can produce with the lowest opportunity cost relative to others. This way, all countries can reach higher levels of consumption based on the principle of comparative advantage rather than absolute advantage, which was introduced by economist David Ricardo.
Therefore, a country with absolute advantage across the board should still engage in international trade, capitalizing on their comparative advantages to maximize global efficiency and consumption.