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Two countries with similar resources want to grow bananas. which country has an absolute advantage for growing bananas? why does this country have an absolute advantage?

Sagot :

The ability of a party to provide an item or service more effectively than its competitors is referred to as the principle of absolute advantage in economics.

How do you find an absolute advantage?

Look at the greater of the two numbers for each product to compute absolute advantage. Canada has the overwhelming advantage in lumber since one worker can produce more lumber (40 tons versus 30 tons).

The ability of a party (a person, corporation, or country) to provide a good or service more effectively than its competitors is referred to as the principle of absolute advantage in economics.

Thus, Country A would have an absolute advantage as it produces more bananas.

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