Multiple Choice
If a nation has a comparative disadvantage in the production of some commodity, which of the following is most likely true?
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2. Introductory Economic Models
PPF - Comparative Advantage and Absolute Advantage
Multiple Choice
Which term describes the ability to produce a good using fewer inputs than another producer?
A
Marginal utility
B
Opportunity cost
C
Comparative advantage
D
Absolute advantage
Verified step by step guidance1
Understand the key terms involved: Marginal utility refers to the additional satisfaction from consuming one more unit of a good; Opportunity cost is the value of the next best alternative foregone; Comparative advantage is the ability to produce a good at a lower opportunity cost than another producer; Absolute advantage is the ability to produce a good using fewer inputs than another producer.
Identify the concept that specifically relates to using fewer inputs to produce the same good. This means focusing on efficiency in production rather than relative opportunity costs or utility.
Recall that Absolute advantage measures productivity in terms of input usage—if one producer can make a good with less labor, capital, or resources than another, they have an absolute advantage.
Compare this with Comparative advantage, which is about producing at a lower opportunity cost, not necessarily fewer inputs.
Conclude that the term describing the ability to produce a good using fewer inputs than another producer is Absolute advantage.
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