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Card 8 / 15:
True or False: The source of comparative advantage must be natural elements like climate and mineral deposits. Explain.
False. Anything that leads to different levels of productivity between two economies can be a source of comparative advantage. For example, the education of workers, the knowledge base of engineers and scientists in a country, the part of a split-up value chain where they have their specialized learning, economies of scale, and other factors can all determine comparative advantage.
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