Dec 30, 2009

The Oxford Dictionary of Economics | absolute advantage

absolute advantage
The use of less resources per unit of output than other producers. With only one type of resource, such as hours of work, a producer with lower inputs has an absolute advantage. In a world with many factors of production absolute advantage is often hard to measure. In any case, absolute advantage gives no advice on what to do with resources, which are best employed where their comparative advantage is greatest.