Question

If a country has an absolute advantage in producing a good, it definitely also has a comparative advantage in producing that good. an absolute advantage in producing a good, it might or might not have a comparative advantage in producing that good. a comparative advantage in production of a good, it must also have an absolute advantage in producing that good. an absolute advantage in producing a good, it definitely will not have a comparative advantage in producing that good. None of these answers is correct.

Answer 1

Answer:

Correct option:

an absolute advantage in producing a good, it might or might not have a comparative advantage in producing that good

Explanation:

If a country has

• an absolute advantage in producing a good, it definitely also has a comparative advantage in producing that good.
• an absolute advantage in producing a good, it might or might not have a comparative advantage in producing that good
• a comparative advantage in production of a good, it must also have an absolute advantage in producing that good.
• an absolute advantage in producing a good, it definitely will not have a comparative advantage in producing that good.
• None of these answers is correct.

the absolute advantage refer to the quantity of output of a certain good.

if country A does 100 and B 50

then, A has an absolute advantage as it can out produce B

the competitive advantage will when the opportunity cost of making a cartain product is lower than the other.

If A can do 500 of anther goods

while B can do 50

then the comparative advantage favors B

as it cost 50 /50 = 1 good to produce the produce

while for country A it cost: 500/50 = 10 goods to produce it.

GIven this analysis, the option B will be the correct

a country with an absolute advantage might or might nothave a comparative advantage as well.