Which of the following refers to the ability of a nation to produce a good more efficiently than any other nation?
A) mercantilism
B) comparative advantage
C) absolute advantage
D) neomercantilism

Question

Quizplus · Accepted Answer

Absolute advantage refers to a nation's ability to produce a good more efficiently than any other nation, without considering the opportunity cost. This concept was introduced by Adam Smith in The Wealth of Nations. Comparative advantage, on the other hand, refers to a nation's ability to produce a good at a lower opportunity cost than another nation. Mercantilism and neomercantilism are economic policies that prioritize a country's exports and protectionism over free trade.

Which of the Following Refers to the Ability of a Nation