A country has an absolute advantage in production if:
A) it can produce the same good using fewer inputs than another country.
B) it can produce a good using fewer inputs than it takes another country to produce a different good.
C) other countries can produce the same good using fewer inputs.
D) it has the lowest opportunity cost of producing a good.

Question

Quizplus · Accepted Answer

Absolute advantage refers to the ability of a country to produce more of a good or service using the same or fewer resources than other countries. Option A states that a country can produce the same good using fewer inputs than another country, which is the correct definition of absolute advantage. Option B is referring to comparative advantage. Option C is incorrect as it contradicts the concept of absolute advantage. Option D is referring to the concept of opportunity cost, which is related to comparative advantage.

A Country Has an Absolute Advantage in Production If