What is meant by comparative advantage? What is meant by absolute advantage?
An absolute advantage means the ability of a nation or firm to produce more of a given good or service than another nation or firm. A comparative advantage is more complex, taking opportunity cost into account. What this means in practice is important. One example might be from the Cold War. During this conflict, it is often said that the United States prevailed because its economy was better able to sustain the cost of developing a massive military,...
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