Which of the following best describes absolute advantage theory?
A) One country gains at the expense of the other country
B) Any country can find a product that it can produce more efficiently
C) A country should produce based on factors it has in abundant supply
D) A country can produce multiple products more efficiently than other countries

Question

Quizplus · Accepted Answer

Absolute advantage theory suggests that any country can find a product that it can produce more efficiently than other countries, meaning it can produce it at a lower cost or with fewer resources. This theory does not suggest that one country gains at the expense of the other or that a country should produce based on factors it has in abundant supply. It also does not necessarily imply that a country can produce multiple products more efficiently than other countries.

Which of the Following Best Describes Absolute Advantage Theory