Two agents with identical resources can each make the same two goods: baseball trophies and racing medals.

Which of the following best captures the idea of absolute advantage for these two agents?

Choose 1 answer:
(A) One agent is able to sell its goods at for a higher price than the other.
(B) One agent has higher opportunity costs of one good, and the other agent has higher opportunity costs of the other good.
(C) An agent is able to produce more of a good or service than another economic agent given the same resources.
(D) Both agents have identical opportunity costs.
(E) One economic agent has a lower opportunity cost of one good, and another economic agent has a lower opportunity cost of a different good

Question

Two agents with identical resources can each make the same two goods: baseball trophies and racing medals.

Which of the following best captures the idea of absolute advantage for these two agents?

Choose 1 answer:
(A) One agent is able to sell its goods at for a higher price than the other.
(B) One agent has higher opportunity costs of one good, and the other agent has higher opportunity costs of the other good.
(C) An agent is able to produce more of a good or service than another economic agent given the same resources.
(D) Both agents have identical opportunity costs.
(E) One economic agent has a lower opportunity cost of one good, and another economic agent has a lower opportunity cost of a different good

Accepted Answer

***C*** ∻Key Concept∻ ⚹Absolute Advantage⚹ ∻Explanation∻ ⚹Absolute advantage refers to the ability of an economic agent to produce a greater quantity of a good or service than another agent with the same amount of resources.⚹◊What is the relationship between absolute advantage and production possibilities frontier in macroeconomics?⍭ Generate me a similar question◊

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