Answer
(a) The given statement is True.
(b) The given statement is False.
(c) The given statement is False.
(d) The given statement is False.
(e) The given statement is False.
Work Step by Step
(a) The given statement is True.
Reason: Even if one country has the absolute advantage in the production of all goods the two countries can still benefit from trade.
So long as one country has a comparative advantage in the production of one good.
(b)The given statement is False.
Reason: It is possible to have a competitive or absolute advantage in everything you do but as you become better at more things the opportunity cost for doing other activities becomes higher as well. The comparative advantage comes from having a lower opportunity cost than trading partners.
(c)The given statement is False.
Reason: The trade only occurs when both parties are benefiting from the trading goods that they have a comparative advantage in producing.
(d)The given statement is False,
Reason: One party may offer a trade that’s beneficial for them but not beneficial for the other party.
However, if a trade is not a good deal for both parties it will not be completed.
(e) The Given statement is False.
Reason: The importing a good from another country at a lower cost than it can be produced domestically will put domestic producers of the good out of work.
