Absolute advantage is when one can produce more with fewer resources, while comparative advantage occurs when production costs are lower than competitors, leading to efficiency and greater output through trade.
Absolute advantage occurs when a person or nation can produce more of a given product using the same amount of resources compared to another person or nation. On the other hand, comparative advantage exists when a country can produce a good at a lower opportunity cost than other countries, leading to increased global production through specialization and trade. By focusing on producing goods they are most efficient at making, countries can benefit from trade and raise overall consumption levels.
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