Asked by
JVani Medina
on Nov 11, 2024
Verified
If Evan has an absolute advantage in cleaning and bookkeeping when compared to Gloria,then:
A) Evan must also have a comparative advantage in cleaning and bookkeeping.
B) Evan must have a comparative advantage in cleaning.
C) Evan must have a comparative advantage in bookkeeping.
D) Gloria has a comparative advantage in neither activity.
E) we can conclude nothing about comparative advantage.
Absolute Advantage
Refers to the ability of a country, company, or individual to produce a good or service at a lower cost per unit than any competitor using the same amount of resources.
Comparative Advantage
The ability of a country or firm to produce a certain good or service at a lower opportunity cost than others, leading to more efficient trade possibilities.
- Differentiate between the concepts of absolute advantage and comparative advantage.
Verified Answer
AG
Learning Objectives
- Differentiate between the concepts of absolute advantage and comparative advantage.
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