The difference between comparative advantage and absolute advantage .

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Answer 1

Question

Definition Video Definition Ability of a country to produce goods and services at a lower opportunity cost compared to other countries. Here, opportunity cost refers to the forgone units of one good in order to produce one more unit of another good. For example, the opportunity cost of producing good X in country A is 2Y and in country B is 1.25Y. Country B has a lower opportunity cost of producing good X than country A. Therefore, country B has a comparative advantage in the production of good X. Video

Chapter 2, Problem 1RQ

To determine

The difference between comparative advantage and absolute advantage.

Expert Solution & Answer

Explanation of Solution

Comparative advantage refers the ability of a nation to produce goods and services at a lower opportunity cost than others. On the other hand, absolute advantage refers to the cost advantage of a nation, which can produce large quantity of goods and services using same level of inputs. Suppose an individual or a firm can produce a particular good at a lower cost than others can, then the individual or the firm has a comparative cost in the production of that good. In addition, if an individual or a firm can produce greater quantity of a good using less units of input than others, then the individual or firm has an absolute advantage in the production of that particular good.

Economics Concept Introduction

Absolute advantage: Absolute advantage refers to the ability to produce a good using fewer inputs than another producer does.

Comparative advantage: Comparative advantage refers to the ability to produce a good at a lower opportunity cost than another producer.

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In economics, the cost of producing a good: Question 6 options: is the maximum value of other goods that could have been produced using the same resources. equals the out-of-pocket costs incurred in producing the good. is the value of inputs used up in production. is the value of other goods that could have been produced using the same resources.

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Answer 2

Question

Definition Video Definition Ability of a country to produce goods and services at a lower opportunity cost compared to other countries. Here, opportunity cost refers to the forgone units of one good in order to produce one more unit of another good. For example, the opportunity cost of producing good X in country A is 2Y and in country B is 1.25Y. Country B has a lower opportunity cost of producing good X than country A. Therefore, country B has a comparative advantage in the production of good X. Video

Chapter 2, Problem 1RQ

To determine

The difference between comparative advantage and absolute advantage.

Expert Solution & Answer

Explanation of Solution

Comparative advantage refers the ability of a nation to produce goods and services at a lower opportunity cost than others. On the other hand, absolute advantage refers to the cost advantage of a nation, which can produce large quantity of goods and services using same level of inputs. Suppose an individual or a firm can produce a particular good at a lower cost than others can, then the individual or the firm has a comparative cost in the production of that good. In addition, if an individual or a firm can produce greater quantity of a good using less units of input than others, then the individual or firm has an absolute advantage in the production of that particular good.

Economics Concept Introduction

Absolute advantage: Absolute advantage refers to the ability to produce a good using fewer inputs than another producer does.

Comparative advantage: Comparative advantage refers to the ability to produce a good at a lower opportunity cost than another producer.

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Answer 3

Question

Definition Video Definition Ability of a country to produce goods and services at a lower opportunity cost compared to other countries. Here, opportunity cost refers to the forgone units of one good in order to produce one more unit of another good. For example, the opportunity cost of producing good X in country A is 2Y and in country B is 1.25Y. Country B has a lower opportunity cost of producing good X than country A. Therefore, country B has a comparative advantage in the production of good X. Video

Chapter 2, Problem 1RQ

To determine

The difference between comparative advantage and absolute advantage.

Expert Solution & Answer

Explanation of Solution

Comparative advantage refers the ability of a nation to produce goods and services at a lower opportunity cost than others. On the other hand, absolute advantage refers to the cost advantage of a nation, which can produce large quantity of goods and services using same level of inputs. Suppose an individual or a firm can produce a particular good at a lower cost than others can, then the individual or the firm has a comparative cost in the production of that good. In addition, if an individual or a firm can produce greater quantity of a good using less units of input than others, then the individual or firm has an absolute advantage in the production of that particular good.

Economics Concept Introduction

Absolute advantage: Absolute advantage refers to the ability to produce a good using fewer inputs than another producer does.

Comparative advantage: Comparative advantage refers to the ability to produce a good at a lower opportunity cost than another producer.

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Answer 4

Question

Definition Video Definition Ability of a country to produce goods and services at a lower opportunity cost compared to other countries. Here, opportunity cost refers to the forgone units of one good in order to produce one more unit of another good. For example, the opportunity cost of producing good X in country A is 2Y and in country B is 1.25Y. Country B has a lower opportunity cost of producing good X than country A. Therefore, country B has a comparative advantage in the production of good X. Video

Chapter 2, Problem 1RQ

To determine

The difference between comparative advantage and absolute advantage.

Expert Solution & Answer

Explanation of Solution

Comparative advantage refers the ability of a nation to produce goods and services at a lower opportunity cost than others. On the other hand, absolute advantage refers to the cost advantage of a nation, which can produce large quantity of goods and services using same level of inputs. Suppose an individual or a firm can produce a particular good at a lower cost than others can, then the individual or the firm has a comparative cost in the production of that good. In addition, if an individual or a firm can produce greater quantity of a good using less units of input than others, then the individual or firm has an absolute advantage in the production of that particular good.

Economics Concept Introduction

Absolute advantage: Absolute advantage refers to the ability to produce a good using fewer inputs than another producer does.

Comparative advantage: Comparative advantage refers to the ability to produce a good at a lower opportunity cost than another producer.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 2, Problem 1RQ

To determine

The difference between comparative advantage and absolute advantage.

Expert Solution & Answer

Explanation of Solution

Comparative advantage refers the ability of a nation to produce goods and services at a lower opportunity cost than others. On the other hand, absolute advantage refers to the cost advantage of a nation, which can produce large quantity of goods and services using same level of inputs. Suppose an individual or a firm can produce a particular good at a lower cost than others can, then the individual or the firm has a comparative cost in the production of that good. In addition, if an individual or a firm can produce greater quantity of a good using less units of input than others, then the individual or firm has an absolute advantage in the production of that particular good.

Economics Concept Introduction

Absolute advantage: Absolute advantage refers to the ability to produce a good using fewer inputs than another producer does.

Comparative advantage: Comparative advantage refers to the ability to produce a good at a lower opportunity cost than another producer.

Answer 6

Chapter 2, Problem 1RQ

To determine

The difference between comparative advantage and absolute advantage.

Expert Solution & Answer

Explanation of Solution

Comparative advantage refers the ability of a nation to produce goods and services at a lower opportunity cost than others. On the other hand, absolute advantage refers to the cost advantage of a nation, which can produce large quantity of goods and services using same level of inputs. Suppose an individual or a firm can produce a particular good at a lower cost than others can, then the individual or the firm has a comparative cost in the production of that good. In addition, if an individual or a firm can produce greater quantity of a good using less units of input than others, then the individual or firm has an absolute advantage in the production of that particular good.

Economics Concept Introduction

Absolute advantage: Absolute advantage refers to the ability to produce a good using fewer inputs than another producer does.

Comparative advantage: Comparative advantage refers to the ability to produce a good at a lower opportunity cost than another producer.

Answer 7

Chapter 2, Problem 1RQ

To determine

The difference between comparative advantage and absolute advantage.

Answer 8

Expert Solution & Answer

Explanation of Solution

Comparative advantage refers the ability of a nation to produce goods and services at a lower opportunity cost than others. On the other hand, absolute advantage refers to the cost advantage of a nation, which can produce large quantity of goods and services using same level of inputs. Suppose an individual or a firm can produce a particular good at a lower cost than others can, then the individual or the firm has a comparative cost in the production of that good. In addition, if an individual or a firm can produce greater quantity of a good using less units of input than others, then the individual or firm has an absolute advantage in the production of that particular good.