Australia has an absolute advantage over South Africa in wool production if, during a year, Australia: Can produce more wool than South Africa. Specialises in wool pproduction. Can produce less wool than South Africa. Can produce more wool than South Africa with a given amount of resources. Consumes more wool than South Africa on average.

Absolute advantage arises when the country can produce more of a good or service with same resources…

Answered: Australia has an absolute advantage…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Australia has an absolute advantage over South Africa in wool production if, during a year, Australia:

		Can produce more wool than South Africa.
		Specialises in wool pproduction.
		Can produce less wool than South Africa.
		Can produce more wool than South Africa with a given amount of resources.
		Consumes more wool than South Africa on average.

Definition Video Definition Ability of a country to produce more output with a given level of input or to produce the same level of output with a lower level of input as compared to the other countries. For example, if Country A produces 200 units with the help of 10 units of labor, and Country B produces 300 units with 10 units of labor, Country A has an absolute advantage in the production of the good. Video

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