Question

recall your readings about shaq moving furniture and playing badketball describe the absolute and comparative advantages.

recall your readings about shaq moving furniture and playing badketball describe the absolute and comparative advantages.

Homework Answers

Answer #1

Absolute advantage refers to the ability of a person, country or any other entity to perform a work or produce goods & services more efficiently than the others. For example, if a person produces 1000 bushels of corn in 100 hours and its most efficient output than that of others, then the person has absolute advantage.

Though, comparative advantage is different to absolute advantage. Comparative advantage refers to the ability to produce goods & services or perform tasks with relatively lower opportunity cost.  With the help of comparative advantage, resources are applied in those activities that can bring specialization and maximum benefits due to lower opportunity cost.

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