📚 Learning Guide
Absolute and Comparative Advantage
easy

Which of the following best describes a scenario in which one country has an absolute advantage over another in the production of a good, considering factor endowments?

Master this concept with our detailed explanation and step-by-step learning approach

Learning Path
Learning Path

Question & Answer
1
Understand Question
2
Review Options
3
Learn Explanation
4
Explore Topic

Choose 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.