The concept at absolute advantage relies on the idea of comparative advantage th

Question

The concept at absolute advantage relies on the idea of comparative advantage the concept of economic efficiency as measured on the production possibility curve. the ability to produce more units of an item with a given amount of resources. the idea of opportunity cost. If Apple's iTunes Music Store increases its "fee" for its music downloads, the law of demand predicts that the number of iTunes music downloads would decrease. iTunes music supply would change but demand would not. the number of iTunes music downloads would increase. there would be no change in the demand for iTunes music downloads. Goods X and Y are complementary goods. A decrease in price of good X has occurred. In the market for good Y. this will lead to a decrease in price and an increase in quantity. an increase in price and an increase in quantity. a decrease in price and a decrease in quantity an increase in price and a decrease in quantity. Other things being equal suppose that the demand for wheat in constant quality units increases. The increase in demand will cause a surplus of wheat. a higher equilibrium quantity, but a lower equilibrium price of wheat. fall in the market clearing price of com. a substitute for wheat. a higher equilibrium price and higher equilibrium quantity of wheat.

Explanation / Answer

1.

Correct answer:

C. The ability to produce more units of an item with a given amount of resources

Explanation:

Under the concept of absolute advantage, a country or entity produces more units of output (a particular good) with the given amount of input in comparison to another company or entity. Here, one country or entity shows a higher level of efficiency than the other country or entity. Thus, the cost of production for one country becomes less than the cost of production of the similar good by another country.

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