A country that produces more of a good or service than another country has a(n) _____ advantage.A.surplusB.absoluteC.importD.comparative
Question
A country that produces more of a good or service than another country has a(n) _____ advantage.
A. surplus
B. absolute
C. import
D. comparative
Solution
The correct answer is B. absolute.
When a country can produce more of a good or service than another country, it is said to have an absolute advantage. This term is used in economics to describe the ability of a party (an individual, a firm, or a country) to produce more of a good or service than competitors, using the same amount of resources.
Surplus (A) refers to the amount of a good that is left over when all needs have been met. Import (C) is a good or service brought into one country from another. Comparative advantage (D), on the other hand, refers to the ability of a party to produce a particular good or service at a lower opportunity cost than another.
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