Figure 3-5

-Refer to Figure 3-5.Hosne has an absolute advantage in the production of
A) purses and Merve has an absolute advantage in the production of wallets.
B) wallets and Merve has an absolute advantage in the production of purses.
C) both goods and Merve has an absolute advantage in the production of neither good.
D) neither good and Merve has an absolute advantage in the production of both goods.

Question

Figure 3-5
 
-Refer to Figure 3-5.Hosne has an absolute advantage in the production of
A) purses and Merve has an absolute advantage in the production of wallets. 
B) wallets and Merve has an absolute advantage in the production of purses. 
C) both goods and Merve has an absolute advantage in the production of neither good. 
D) neither good and Merve has an absolute advantage in the production of both goods.

Quizplus · Accepted Answer

Absolute advantage refers to the ability of a party to produce more of a good or service with the same amount of resources as another party. If Hosne has an absolute advantage in both goods, it means she can produce more purses and wallets than Merve with the same resources, while Merve cannot produce more of either good than Hosne.

Figure 3-5 -Refer to Figure 3-5.Hosne Has an Absolute Advantage in the Absolute