Absolute advantage is determined by ?
Correct answer: A. actual differences in labor production between countries
- A. actual differences in labor production between countries
- B. relative differences in labor productivity between countries
- C. Both (a) and (b)
- D. Neither (a) nor (b)
Explanation
Absolute advantage is based on an absolute productivity comparison, such as how much labor output differs between countries. Relative productivity differences instead determine comparative advantage, so option b is not the defining criterion.
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