Asked by Toshia Bolton on May 05, 2024
Verified
Absolute advantage is based on opportunity cost.
Absolute Advantage
The capability of a country or individual to produce more of a good or service with the same amount of resources as competitors.
Opportunity Cost
The price paid for not selecting the next most favorable opportunity when deciding.
- Understand the principles of comparative and absolute advantage within the context of production.
Verified Answer
KW
Kelsi WhiteMay 07, 2024
Final Answer :
False
Explanation :
Absolute advantage refers to the ability of a party to produce a greater quantity of a good, product, or service than competitors, using the same amount of resources. It does not directly relate to opportunity cost, which is the cost of forgoing the next best alternative when making a decision.
Learning Objectives
- Understand the principles of comparative and absolute advantage within the context of production.
Related questions
Comparative Advantage Is Based on Opportunity Costs
If the Opportunity Cost of Manufacturing Machinery Is Lower in ...
(Figure: Comparative Advantage)Use Figure: Comparative Advantage ...
An Economy Is Said to Have a Comparative Advantage in ...
On Planet Economus, the Countries Blib and Flib Can Produce ...