Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Country A can produce 10 cars per hour while Country B can produce 5 cars per hour.
B
Country A can produce 5 cars per hour and 10 bikes per hour, while Country B can produce 4 cars per hour and 12 bikes per hour.
C
Country A has a lower opportunity cost in producing cars than Country B.
D
Country A and Country B are producing the same number of goods but using different resources.
Understanding the Answer
Let's break down why this is correct
Answer
Absolute advantage occurs when one person, company, or country can produce more of a good or service than another, using the same amount of resources. For example, imagine two farmers: Farmer A can grow 10 apples in a day, while Farmer B can only grow 5 apples in the same time. In this case, Farmer A has an absolute advantage in apple production because he can produce more apples than Farmer B without needing extra resources. This concept helps us understand why some people or places specialize in certain products, as they can make more efficiently. Therefore, the scenario that best illustrates absolute advantage is when one party consistently outperforms another in producing the same item.
Detailed Explanation
Country A makes more cars in the same time than Country B. Other options are incorrect because This option compares production of two different items; This talks about opportunity cost, which is what you give up to make something.
Key Concepts
absolute advantage
Topic
Comparative and Absolute Advantage
Difficulty
easy level question
Cognitive Level
understand
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