Absolute advantage in laundry and meal preparation Comparative advantage in laundry and meal preparation. Concept introduction: Absolute advantage: The absolute advantage is defined as the ability of an individual, country or a group to a produce a commodity at a low cost than the others. If we take an example it would be very easy to produce apples in the European countries because it has got the climate advantage, countries like India cannot produce apples at a low cost. The absolute advantage enjoyed by an individual or country may be due to their weather, technology or something else many factors can contribute to this. Comparative Advantage: The term comparative advantage is associated with the famous economist David Ricardo. The comparative advantage occurs when a country or an individual produces a good relatively cheaper than the other countries. This means that the opportunity cost of producing the good will be lower than the other countries. The comparative advantage is explained in terms of opportunity cost.

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Definition Video Definition Ability of a country to produce goods and services at a lower opportunity cost compared to other countries. Here, opportunity cost refers to the forgone units of one good in order to produce one more unit of another good. For example, the opportunity cost of producing good X in country A is 2Y and in country B is 1.25Y. Country B has a lower opportunity cost of producing good X than country A. Therefore, country B has a comparative advantage in the production of good X. Video

Chapter 2, Problem 15P

To determine

To find:

Absolute advantage in laundry and meal preparation

Comparative advantage in laundry and meal preparation.

Concept introduction:

Absolute advantage: The absolute advantage is defined as the ability of an individual, country or a group to a produce a commodity at a low cost than the others. If we take an example it would be very easy to produce apples in the European countries because it has got the climate advantage, countries like India cannot produce apples at a low cost. The absolute advantage enjoyed by an individual or country may be due to their weather, technology or something else many factors can contribute to this.

Comparative Advantage: The term comparative advantage is associated with the famous economist David Ricardo. The comparative advantage occurs when a country or an individual produces a good relatively cheaper than the other countries. This means that the opportunity cost of producing the good will be lower than the other countries. The comparative advantage is explained in terms of opportunity cost.

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Definition Video Definition Ability of a country to produce goods and services at a lower opportunity cost compared to other countries. Here, opportunity cost refers to the forgone units of one good in order to produce one more unit of another good. For example, the opportunity cost of producing good X in country A is 2Y and in country B is 1.25Y. Country B has a lower opportunity cost of producing good X than country A. Therefore, country B has a comparative advantage in the production of good X. Video

Chapter 2, Problem 15P

To determine

To find:

Absolute advantage in laundry and meal preparation

Comparative advantage in laundry and meal preparation.

Concept introduction:

Absolute advantage: The absolute advantage is defined as the ability of an individual, country or a group to a produce a commodity at a low cost than the others. If we take an example it would be very easy to produce apples in the European countries because it has got the climate advantage, countries like India cannot produce apples at a low cost. The absolute advantage enjoyed by an individual or country may be due to their weather, technology or something else many factors can contribute to this.

Comparative Advantage: The term comparative advantage is associated with the famous economist David Ricardo. The comparative advantage occurs when a country or an individual produces a good relatively cheaper than the other countries. This means that the opportunity cost of producing the good will be lower than the other countries. The comparative advantage is explained in terms of opportunity cost.

Expert Solution & Answer

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Answer 3

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Definition Video Definition Ability of a country to produce goods and services at a lower opportunity cost compared to other countries. Here, opportunity cost refers to the forgone units of one good in order to produce one more unit of another good. For example, the opportunity cost of producing good X in country A is 2Y and in country B is 1.25Y. Country B has a lower opportunity cost of producing good X than country A. Therefore, country B has a comparative advantage in the production of good X. Video

Chapter 2, Problem 15P

To determine

To find:

Absolute advantage in laundry and meal preparation

Comparative advantage in laundry and meal preparation.

Concept introduction:

Absolute advantage: The absolute advantage is defined as the ability of an individual, country or a group to a produce a commodity at a low cost than the others. If we take an example it would be very easy to produce apples in the European countries because it has got the climate advantage, countries like India cannot produce apples at a low cost. The absolute advantage enjoyed by an individual or country may be due to their weather, technology or something else many factors can contribute to this.

Comparative Advantage: The term comparative advantage is associated with the famous economist David Ricardo. The comparative advantage occurs when a country or an individual produces a good relatively cheaper than the other countries. This means that the opportunity cost of producing the good will be lower than the other countries. The comparative advantage is explained in terms of opportunity cost.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 4

Question

Definition Video Definition Ability of a country to produce goods and services at a lower opportunity cost compared to other countries. Here, opportunity cost refers to the forgone units of one good in order to produce one more unit of another good. For example, the opportunity cost of producing good X in country A is 2Y and in country B is 1.25Y. Country B has a lower opportunity cost of producing good X than country A. Therefore, country B has a comparative advantage in the production of good X. Video

Chapter 2, Problem 15P

To determine