Answered

What is the definition of "absolute advantage"?
Select one:
O a. The ability of one country to use its resources to make a product or service more efficiently than other countries.
O b. The cost of increased consumer choice and production of an item in a developed country in comparison to a lesser developed country.
O c. The cost of giving something up to get something else.
O d. The ability of a country to produce a good at a lower opportunity cost than another country.



Answer :

GinnyAnswer
The correct answer is: a. The ability of one country to use its resources to make a product or service more efficiently than other countries. Explanation: 1. Absolute advantage refers to a situation in which a country can produce a good or service more efficiently (using fewer resources or time) than another country. 2. This efficiency allows the country with an absolute advantage to produce more output with the same amount of resources or the same output with fewer resources compared to another country. 3. This concept is based on productivity and resource allocation within a country. 4. For example, if Country A can produce 10 cars with the same amount of resources that Country B needs to produce 5 cars, then Country A has an absolute advantage in car production over Country B. Understanding absolute advantage is crucial in international trade as countries can specialize in producing goods or services where they have an absolute advantage, leading to increased efficiency and overall benefits for all trading partners involved.