The producer that requires a smaller quantity of inputs to produce a certain amount of a good, relative to the quantities of inputs required by other producers to produce the same amount of that good, a. has a low opportunity cost of producing that good, relative to the opportunity costs of other producers. b. has a comparative advantage in the production of that good. c. has an absolute advantage in the production of that good. d. should be the only producer of that good.

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Business

Jaidyn

11 November, 09:38

The producer that requires a smaller quantity of inputs to produce a certain amount of a good, relative to the quantities of inputs required by other producers to produce the same amount of that good, a. has a low opportunity cost of producing that good, relative to the opportunity costs of other producers. b. has a comparative advantage in the production of that good. c. has an absolute advantage in the production of that good. d. should be the only producer of that good.

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Answers (1)

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Finley Stewart · Answer 1

Option (C) is correct.

Explanation:

A country or a producer has an absolute advantage in producing a commodity if it uses the lower quantity of inputs than the other country or a producer for producing the same amount of goods.

For example;

Suppose there are two countries; Japan and china.

Each are producing 5 packets of bread.

Japan produces these packets of bread with 4 labor hours and china produces these packets of bread with 2 labor hours.

So in this case, China has an absolute advantage because it produces the same quantity of goods with the fewer inputs.