Economics Production Possibility Frontier Questions
Absolute advantage refers to the ability of a country, individual, or firm to produce a good or service more efficiently or with fewer resources than another country, individual, or firm. It focuses on the productivity and efficiency of production.
Comparative advantage, on the other hand, refers to the ability of a country, individual, or firm to produce a good or service at a lower opportunity cost than another country, individual, or firm. It considers the opportunity cost of producing one good in terms of the foregone production of another good.
In summary, absolute advantage focuses on productivity and efficiency, while comparative advantage considers opportunity cost and the ability to produce a good or service at a lower cost relative to other goods or services.