Question

Which of the following is an example of absolute advantage?

a. when a country produces goods at a lower opportunity cost than its competitors

b. when a country specialized in the product they are most efficient at producing and trades for products that other countries are most efficient at producing

c. When a country has an economic surplus and its trading partner has an economic shortage

d. When a country only exports products and does not import products

Answer 1

Absolute advantage is when a country can produce more of a good per unit of labor than another country, indicating a productivity edge. This differs from comparative advantage, which is based on lower opportunity costs, not just productivity.

Step-by-step explanation:

An example of absolute advantage occurs when a country can produce a particular good using fewer resources than another country. It is when a country has a productivity edge in production. This is different from comparative advantage, which exists when a country can produce a good at a lower opportunity cost than its competitors. Therefore, the specific example of absolute advantage would be when a country can produce more of any good per unit of labor than another country or individual.