1 Answer | Add Yours
In this link, we are looking only at absolute advantage and not at comparative advantage. We therefore are only looking at which of these fictional countries can produce the most Blu-ray discs per worker per day. This does not tell us which country has a lower opportunity cost per disc and therefore does not tell us which country has a comparative advantage in making discs.
From this table, we can see that the country of Aries has the absolute advantage in the production of Blu-ray discs. In that country, each worker can make 25 discs each day. In the country of Pisces, each worker can only make 20 discs each day. This means that each worker in Aries is making more discs each day than each worker in Pisces is. Therefore, we can say that Aries is more efficient at making discs.
We’ve answered 318,915 questions. We can answer yours, too.Ask a question