35.8k views
5 votes
If country abc can produce a unit of good 1 with fewer resourceswith fewer resources than can country​ xyz, it is correct to say that country abc

User Doc Kodam
by
8.3k points

1 Answer

6 votes
Country ABC shows that it has ABSOLUTE ADVANTAGE over Country XYZ.

The absolute advantages is proven when Country ABC was able to produce a unit of good 1 with fewer resources than Country XYZ.

Absolute advantage is different from comparative advantage.

Comparative advantage deals with opportunity cost. If a country is able to produce goods at lower opportunity cost than its trading country, then, it has comparative advantage.
User Rgroli
by
7.8k points

No related questions found