When country A uses fewer resources to produce a product than another country, then:
A) country A has a comparative advantage in the production of the product.
B) country A has an absolute advantage in the production of the product.
C) country A has a comparative disadvantage in the production of the product.
D) country A has an absolute disadvantage in the production of the product.
E) None of the above

Question

Quizplus · Accepted Answer

Country A having fewer resources to produce a product than another country indicates that it can produce the product more efficiently, which is the definition of having an absolute advantage. Comparative advantage, on the other hand, refers to the ability to produce a good at a lower opportunity cost than others, which is not directly related to the amount of resources used.

When Country a Uses Fewer Resources to Produce a Product