BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -absolute advantage, economic concept that is used to refer to a party’s superior production capability. Specifically, it refers to the ability to produce a certain good or service at lower cost (i.e., more efficiently) than another party.

Detailed explanation-2: -The benefit of the theory of absolute advantage is that it can help countries maximize their productivity and efficiency. If one country has an absolute advantage over every other when it comes to producing one product, having that nation focus all of its resources on creating that product benefits the whole planet.

Detailed explanation-3: -A clear example of a nation with an absolute advantage is Saudi Arabia, a country with abundant oil supplies that provide it with an absolute advantage over other nations. Other examples include Colombia and its climate-ideally suited to growing coffee-and Zambia, possessing some of the world’s richest copper mines.

Detailed explanation-4: -The country with the lowest opportunity cost in a specific area has a comparative advantage. Having a comparative advantage can give a company the ability to sell their goods and services at a lower price than its competitors.

Detailed explanation-5: -Comparative advantage describes a situation in which an individual, business or country can produce a good or service at a lower opportunity cost than another producer.