Absolute Advantage
Absolute advantage occurs when one producer can produce more of a good with fewer inputs than another. If a country can produce 100 cars with the same resources another uses to produce 50, it has absolute advantage.
Real World
Saudi Arabia has an absolute advantage in oil production because its shallow reserves cost roughly $3 per barrel to extract, compared to $30–50 for US shale producers.
Exam Focus
Examiners expect you to explain why comparative advantage matters more than absolute advantage — always link to opportunity cost.
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