Asked by Julia Michalowski on May 09, 2024
Verified
If Nation A requires more resources to produce each bale of cloth than Nation B does, then we say that
A) Nation A has the absolute advantage over Nation B in producing cloth.
B) Nation B has the absolute advantage over Nation A in producing cloth.
C) Nation A has the comparative advantage over Nation B in producing cloth.
D) Nation B has the comparative advantage over Nation A in producing cloth.
Absolute Advantage
The ability of an individual, company, or country to produce more of a good or service with a given amount of resources than competitors.
Comparative Advantage
The ability of an entity to produce a good or service at a lower opportunity cost than others, leading to trade benefits.
- Understand the foundational concepts of comparative advantage and their role in facilitating trade among individuals and countries.
Verified Answer
SP
Sudip PandeyMay 15, 2024
Final Answer :
B
Explanation :
Nation B has the absolute advantage because it can produce each bale of cloth using fewer resources than Nation A.
Learning Objectives
- Understand the foundational concepts of comparative advantage and their role in facilitating trade among individuals and countries.
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