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JAMB Economics 2004 Question 23

Question 23

International Trade

A country is said to have absolute advantage when she

  1. A.has a higher opportunity cost in the production of a good
  2. B.can sell to other countries without buying from them
  3. C.can produce more of any good with fewer resources
  4. D.has a lower opportunity cost in the production of good
Show the answer and explanation

Answer: C (can produce more of any good with fewer resources)

Explanation

Absolute advantage means producing more of a good with the same (or fewer) resources than another country. A lower opportunity cost is comparative advantage.