Q:
What is an absolute advantage example?
A:
Quick Answer
An absolute advantage example is Michael Jordan, who is the best at playing basketball. Adam Smith introduced the absolute advantage theory in the context of a nation, but it can be applied to individuals too.
Continue ReadingFull Answer
Smith, who was a Scottish economist, introduced the absolute advantage theory in 1776. If a nation could produce a specific good more than any other nation even with the same amount of resources, he said it had absolute advantage. David Ricardo, another economist, introduced the principle of comparative advantage. Each nation is said to have a comparative advantage at producing a good if it can produce it at a lower opportunity cost. Opportunity cost refers to what is given up for producing another good.
Learn more about EconomicsSources:
Related Questions
-
Q:
What are the pros and cons of imposing quotas on some imported goods?
A: The primary advantage of imposing quotas on imported goods is protecting new industries from foreign competitors. The main disadvantage of erecting quotas ... Full Answer >Filed Under: -
Q:
What is an advantage of a traditional economy?
A: One advantage of a traditional economy is that it tends to be more stable than a market economy. Traditional economies are based on tradition and custom th... Full Answer >Filed Under: -
Q:
When does a private closed economy expand?
A: The Theory of Aggregate Investment predicts that the economic advantage of capital inflows, either from a government or from external private sources, is t... Full Answer >Filed Under: -
Q:
What are some advantages of economies of scale?
A: The most significant advantage of achieving economies of scale is a reduced cost per unit of production. Most other advantages stem from this primary benef... Full Answer >Filed Under:
