The table below shows the quantity demanded (in thousands) and quantity supplied (in thousands) of computers in the U.S. and Canada at different prices.Table 20.5

-Absolute advantage is irrelevant, because knowing the absolute number of labor hours required to produce a good does not indicate if a country benefits from trade.

Question

The table below shows the quantity demanded (in thousands) and quantity supplied (in thousands) of computers in the U.S. and Canada at different prices.Table 20.5
 
-Absolute advantage is irrelevant, because knowing the absolute number of labor hours required to produce a good does not indicate if a country benefits from trade.

Quizplus · Accepted Answer

Absolute advantage only measures the efficiency of producing a good in terms of labor hours, while trade is based on comparative advantage, which determines which country can produce a good at a lower opportunity cost. Therefore, knowing the absolute number of labor hours required to produce a good does not necessarily indicate if a country benefits from trade.

The Table Below Shows the Quantity Demanded (In Thousands) and Quantity