Suppose a producer requires a smaller quantity of inputs to produce a good. Which of the following is correct?
A)The producer should import that good.
B)The producer has a comparative advantage in the production of that good.
C)The producer has an absolute advantage in the production of that good.
D)The producer has both an absolute and comparative advantage in the production of that good.

Question

Quizplus · Accepted Answer

A producer who requires fewer inputs to produce a good has an absolute advantage in its production.

Suppose a Producer Requires a Smaller Quantity of Inputs to Produce