A country that has an absolute advantage in producing both wheat and cloth will always benefit from trade with another country, regardless of the opportunity costs involved. True or False?

False. A country that can produce both wheat and cloth more efficiently than another country has an absolute advantage, but trade depends on comparative advantage, which is based on opportunity costs. If the country’s opportunity cost of producing wheat is very high relative to cloth, it may still be better off producing only cloth and importing wheat. Without a comparative advantage in at least one good, the country might not gain from trade. For example, if wheat is cheap to make in both countries but cloth is expensive, the wheat‑producing country might still benefit by trading cloth for wheat, but not if its opportunity costs are unfavorable.