Questions
Single choice
What is absolute advantage?
Options
A.a. An advantage a country has when they are able to produce a product at a lower opportunity cost than another country
B.b. The advantage that one country has over another when they possess a greater quantity of resources
C.c. An advantage a country has when they are able to produce a product using fewer resources than another country
D.d. An advantage obtained by a firm who has been given cash subsidies from the government
View Explanation
Verified Answer
Please login to view
Step-by-Step Analysis
To tackle the concept, I’ll evaluate each option in turn and explain why it does or does not align with the standard definition of absolute advantage.
Option a: 'An advantage a country has when they are able to produce a product at a lower opportunity cost than another country.' This describes comparative advantage, not absolute advantage. Lower opportunity cost means the country sacrifices less of other goods to produce this......Login to view full explanationLog in for full answers
We've collected over 50,000 authentic exam questions and detailed explanations from around the globe. Log in now and get instant access to the answers!
Similar Questions
When one producer can create more of a good than another producer using the same quantity of resources, the first producer has:
Jack has an absolute advantage in producing widgets, when:
Question at position 2 Which of the following is true of the absolute advantage theory of international trade? It emphasizes relative advantage in one economic activity that one nation enjoys in comparison with other nations. It divides the countries of the world into three categories based on innovation.It advocates extensive government intervention in international trade.It was the first theory that advocated free trade.
Question at position 1 Which of the following ideas is closely linked to the theory of absolute advantage? All international trade must be closely regulated by governments. Free market forces should determine how much to trade with minimal government intervention. Governments should actively protect domestic industries from imports and vigorously promote exports. Nations should specialize in economic activities in which they have comparative advantage.
More Practical Tools for Students Powered by AI Study Helper
Making Your Study Simpler
Join us and instantly unlock extensive past papers & exclusive solutions to get a head start on your studies!