Which of the following statements is not correct?

1) Trade allows for specialization.

2) Trade has the potential to benefit all nations.

3) Trade allows nations to consume outside of their production possibilities curves.

4) Absolute advantage is the driving force of specialization.

d. Absolute advantage is the driving force of specialization.

Explanation:

The absolute advantage is the ability of a person, company or country to produce a good, having to use less production factors than another.

In other words, the comparative advantage tells us that one countries better than others in the production of a good or service. It offers higher quality at a lower cost. By having better resources such as technology, time, capital or a better human factor, something can be produced more efficiently. This means that this measurement can be used when establishing comparisons between different producers.

In this way, we can compare nations, companies or individuals based on their spending of resources when producing a good. The one that uses less resources to carry out this action, we will say that it has absolute advantage.