The producer who has the smaller opportunity cost of producing a good is said to have an absolute advantage in producing that good.

Question

Quizplus · Accepted Answer

The producer with the smaller opportunity cost of producing a good is said to have a comparative advantage, not an absolute advantage. Absolute advantage refers to the ability of a party to produce a greater quantity of a good, product, or service than competitors, using the same amount of resources.

The Producer Who Has the Smaller Opportunity Cost of Producing