The United States has an absolute advantage in producing sugar over all of the other sugar-producing countries

Economics Dec 19, 2020

The United States has an absolute advantage in producing sugar over all of the other sugar-producing countries. Does this fact mean that we should not import any sugar from the other countries?

Expert Solution

No. The gains from specialization are based on comparative advantage and not absolute advantage. Having an absolute advantage does not mean it has a comparative advantage in the production of sugar. When a country has a comparative advantage, it can generate a product at a reduced opportunity cost compared to another country. Therefore, U.S will benefit if it import sugar from a nation that has a comparative advantage in the production of sugar.

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