Explain the Difference Between Comparative Advantage and Absolute Advantage

question 74

Essay

Explain the difference between comparative advantage and absolute advantage.

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Definitions:

Industrial Nations

Countries that are highly developed and have a major portion of their economy based on manufacturing and industry.

Labor Productivity

A measure of economic performance that compares the amount of goods and services produced (output) with the number of hours worked to produce those goods and services.

Economies Of Scale

Cost advantages that enterprises obtain due to their scale of operation, resulting in decreased costs per unit.

Technological Advance

Improvements in technology, leading to more efficient production processes, new product features, or entirely new products.