ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Absolute advantage is the ability of an entity to produce a product or service at a lower absolute cost per unit using a smaller number of inputs or a more efficient process than another entity producing the same good or service.

Detailed explanation-2: -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.

Detailed explanation-3: -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-4: -Geography: A country’s location can provide proximity to natural resources, which can give it an absolute advantage over other countries. For example, one nation may produce oil more quickly and effectively than another country can, giving the former an absolute advantage.

Detailed explanation-5: -In economics, the principle of absolute cost advantage refers to the ability of a business to produce more, sell more of a good or service than competitors, using the same amount of resources.