The Difference Between Absolute and Comparative Advantage Is That

question 28

Multiple Choice

The difference between absolute and comparative advantage is that:

• A)absolute advantage refers to input cost,while comparative advantage refers to opportunity cost.
• B)absolute advantage refers to opportunity cost,while comparative advantage refers to input cost.
• C)absolute advantage refers to individuals,and comparative advantage refers to countries.
• D)absolute advantage refers to countries,and comparative advantage refers to individuals.
• E)absolute advantage is applicable to intranational trade,while comparative advantage applies to international trade.

---

Definitions:

Perfectly Competitive

A market structure characterized by many buyers and sellers, where no single entity has a significant impact on prices.

Short Run

A period in which at least one factor of production is fixed, limiting the ability to adjust production rapidly.

Profits

The financial gain obtained when the revenue from business activities exceeds the expenses, taxes, and costs associated with maintaining the business.

Marginal Cost

The investment needed to manufacture an extra unit of a product or service.