# Which Calculation Helps Determine Which Producer Has The Absolute Advantage?

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Absolute Advantage is the ability with which an increased number of goods and services can be produced and that too at a better quality as compared to competitors whereas Comparative Advantage signifies the ability to manufacture goods or services at a relatively lower opportunity cost. Red Country takes fewer hours to produce Good B 4 hours.

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### To determine who has a comparative advantage in producing a particular item we need to calculate each producers opportunity costs of creating the items.

Which calculation helps determine which producer has the absolute advantage?. For example extracting oil in Saudi Arabia and other Middle Eastern countries is essentially just a matter of drilling a hole. One worker in Venezuela can produce 60 barrels of oil compared to a worker in Canada who can produce only 20. When both producers specialize according to their comparative advantage they increaSe the total amount of goods and services that are available for consumption.

Which calculation helps determine which producer has the absolute advantage. The calculation that helps determine which producer has the absolute advantage isthe quantity produced minus the resources used. Resources used multiplied by amount produced Amount produced divided by resources used Amount produced minus resources used Resources used divided by amount produced LOGIN TO VIEW ANSWER.

Such an advantage is established when compared to competitors. In Table 1 Saudi Arabia has an absolute advantage in the production of oil because it only takes an hour to produce a barrel of oil compared to two hours in the United StatesThe United States has an absolute advantage in the production of corn. Resources used multiplied by amount produced Amount produced divided by resources used Amount produced minus resources used Resources used divided by amount produced Amount produced minus resources used -is a calculation which helps to determine which producer has the absolute advantage.

To simplify lets say that Saudi Arabia and the United States each have 100 worker hours see Table 2. One worker in Venezuela can produce 60 barrels of oil compared to a worker in Canada who can produce only 20. In International trade absolute advantage and.

Resources used multiplied by amount produced Amount produced divided by resources used. Amount produced minus resources used -is a calculation which helps to determine which producer has the absolute advantage. 1 Answers Which calculation helps determine which producer has the absolute advantage.

The differentiation between the varying abilities of companies and nations to produce goods efficiently is the basis for the concept of absolute advantage. An absolute advantage is achieved through low-cost production. The absolute advantage is the ability of a party person company or country to produce a good or service at a lower cost than any competitor.

A producer with a comparative advantage has the ability to produce a good or service at. Absolute advantage looks at the. A country has an absolute advantage in producing if it uses fewer resources to produce.

In other words it refers to an individual company or country that can produce at a lower marginal cost. Which calculation helps determine which producer has the absolute advantage. To calculate absolute advantage look at the larger of the numbers for each product.

Absolute advantage can be the result of a countrys natural endowment. To calculate absolute advantage look at the larger of the numbers for each product. Therefore Red Country has an Absolute Advantage in the production of Good B.

Blue county has an absolute advantage because it takes fewer hours to produce a unit of Good A than Red country which takes 10 hours. One worker in Canada can produce more lumber 40 tons versus 30 tons so Canada has the absolute advantage in lumber. Fewer materials are used to produce a product.

Absolute advantage can be the. One worker in Canada can produce more lumber 40 tons versus 30 tons so Canada has the absolute advantage in lumber. Absolute advantage is when a producer can produce a good or service in greater quantity for the same cost or the same quantity at a lower cost than other producers.

Differences Between Absolute and Comparative Advantage.

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