Distinguish the concepts of comparative advantage and absolute advantage
What will be an ideal response?
Comparative advantage is the ability to produce a good or service at a lower opportunity cost compared to other producers, while absolute advantage is the ability to produce more units of a good or service using a given quantity of labor or resource inputs. Comparative advantage is a relative concept and it is the basis for specialization.
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If the price of watermelons is 5 pesos in Argentina and the exchange rate is 4 pesos per dollar, then what is the dollar price of watermelons?
A) $0.75 B) $0.80 C) $1.25 D) $2.00
The Great Depression, in which real GDP fell and unemployment rose, can be characterized as a ________
A) inflationary gap B) long-run equilibrium C) recessionary gap D) full-employment equilibrium
The Fed's inability to instantaneously observe changes in inflation and economic growth result in
A) information lag. B) impact lag. C) policy lag. D) jet lag.
According to the graph shown, if the market is in equilibrium, producer surplus is:
A. $30.
B. $20.
C. $50.
D. $60.