BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -Absolute advantage describes a situation in which an individual, business or country can produce more of a good or service than any other producer with the same quantity of resources.

Detailed explanation-2: -Countries are better off if they specialize in producing the goods for which they have a comparative advantage. They can then trade for the goods for which other countries have a comparative advantage.

Detailed explanation-3: -Comparative advantage is an economy’s ability to produce a particular good or service at a lower opportunity cost than its trading partners. Comparative advantage is used to explain why companies, countries, or individuals can benefit from trade.

Detailed explanation-4: -Comparative advantage is a key principle in international trade and forms the basis of why free trade is beneficial to countries. The theory of comparative advantage shows that even if a country enjoys an absolute advantage in the production of goods, trade can still be beneficial to both trading partners.

Detailed explanation-5: -Absolute Advantage: The ability of an actor to produce more of a good or service than a competitor. Comparative Advantage: The ability of an actor to produce a good or service for a lower opportunity cost than a competitor.