Asked by Austin Parker on May 19, 2024
Verified
The existence of absolute advantage
A) implies that there will be no benefits from trade taking place between two nations.
B) refers to a situation where one country can produce one particular good with fewer units of resources than the other country.
C) fosters the self-sufficiency of the two nations.
D) refers to a situation in which one country can produce all goods with fewer units of resources than can another country.
Absolute Advantage
The ability of an entity to produce a good or service more efficiently than its competitors, using fewer resources.
- Absorb the ideas of absolute and comparative advantage and their usage in the global marketplace.
- Distinguish between absolute and comparative advantages using practical examples.
Verified Answer
SB
Sahel BaniassadiMay 23, 2024
Final Answer :
B
Explanation :
Absolute advantage refers to a situation in which one country can produce one particular good with fewer units of resources than the other country. It does not necessarily mean that trade will not bring benefits or foster self-sufficiency, nor does it mean that one country can produce all goods with fewer units of resources than another country.
Learning Objectives
- Absorb the ideas of absolute and comparative advantage and their usage in the global marketplace.
- Distinguish between absolute and comparative advantages using practical examples.