3 - Absolute Advantage vs. Comparative Advantage
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Practice Questions
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What does absolute advantage mean?
💡 Hint: Think about which country can simply create more of one product.
Define comparative advantage.
💡 Hint: Focus on the costs associated with production.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What does absolute advantage refer to?
💡 Hint: Think about efficiency in production.
True or False: A country can have both an absolute and a comparative advantage.
💡 Hint: Consider the definitions of both types of advantages.
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Challenge Problems
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Consider two countries, X and Y. Country X can produce 100 units of product A and 50 units of product B. Country Y can produce 70 units of product A and 30 units of product B. Discuss which country has absolute and comparative advantages?
💡 Hint: Use ratios to derive opportunity costs.
If Country A has an absolute advantage in both computers and textiles but still trades, analyze the economic rationale for it continuing such practice.
💡 Hint: Reflect on specialization vs. overall efficiency.
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