📚 Learning Guide
Absolute and Comparative Advantage
easy

Which country is said to have an absolute advantage in the production of a good if it can produce more of that good using the same amount of resources compared to another country?

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Learning Path
Learning Path

Question & Answer
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Choose the Best Answer

A

The country that uses fewer resources

B

The country that produces more of the good

C

The country that has higher opportunity costs

D

The country that can trade the good

Understanding the Answer

Let's break down why this is correct

Answer

A country has an absolute advantage in producing a good if it can make more of that good than another country using the same resources. This means that the country is more efficient at producing that item. For example, if Country A can produce 10 tons of rice using the same land and labor that Country B uses to produce only 5 tons, then Country A has an absolute advantage in rice production. This is important because it shows which country can produce certain goods more effectively, allowing them to potentially trade with others for better economic benefits. Understanding absolute advantage helps countries decide how to use their resources most wisely.

Detailed Explanation

A country has an absolute advantage if it can make more of something with the same resources. Other options are incorrect because Some might think using fewer resources means an advantage; Higher opportunity costs mean giving up more to make something.

Key Concepts

Absolute advantage
Topic

Absolute and Comparative Advantage

Difficulty

easy level question

Cognitive Level

understand

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