Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Country A can produce more of Good X than Country B using the same resources.
B
Country A can produce Good X at a lower opportunity cost than Country B.
C
Country B has more natural resources than Country A, but produces less of Good X.
D
Country A and Country B produce the same amount of Good X, but with different resource allocations.
Understanding the Answer
Let's break down why this is correct
Answer
A country has an absolute advantage when it can produce more of a good using the same amount of resources compared to another country. 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 advantage can come from various factors, such as having better soil, more advanced technology, or a larger workforce. It means that Country A is more efficient at making rice than Country B. However, it's important to note that this does not mean Country A is better at producing all goods, just this particular one.
Detailed Explanation
Country A has an absolute advantage if it can make more of Good X using the same resources. Other options are incorrect because This option confuses absolute advantage with comparative advantage; This option suggests that having more resources means better production, but it doesn't show efficiency.
Key Concepts
Factor endowments
Topic
Absolute and Comparative Advantage
Difficulty
easy level question
Cognitive Level
understand
Ready to Master More Topics?
Join thousands of students using Seekh's interactive learning platform to excel in their studies with personalized practice and detailed explanations.