Question

what are the theories of comparative advantage and absolute advantage? Given examples.

Answer 1

ans:comparative advantage:the ability of a party to produce a particular goods or service at a lower marginal and opportunity cost over another....

absolute advantage: the capability to produce more of a givan product using less of a given resource that a competing entity.

example of comparative advantage: for example, oil-producing nations have a comparative advantage in chemicals.

example of Absolute advantage:the Canadian economy, which is rich low cost land, has an absolute advantage in agriculture production relative to some other countries.