The ability of one producer to create more of a good than another producer using the same quantity of resources is called
A) comparative advantage.
B) absolute advantage.
C) a positive-sum game.
D) gains from trade.
E) the law of increasing relative cost.

Question

Quizplus · Accepted Answer

Absolute advantage refers to the ability of a producer to create more of a good than another producer using the same quantity of resources. This concept is often used to determine which producer should specialize in producing a particular good and then trade with others to maximize overall efficiency and output.

The Ability of One Producer to Create More of a Good