absolute advantage
total advantage, ability of one company to produce a good at lower costs than any other business in the same industry (Economics) | ||||
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Absolute advantage definition was found in categories: Social Science(2) Sports(1) Encyclopedia(1)
| Environmental Economics Glossary |
Absolute Advantage
The ability of a producer to produce a higher absolute quantity of a good with the productive resource available.
The ability of a producer to produce a higher absolute quantity of a good with the productive resource available.
| A Glossary of Political Economy Terms |
Absolute advantage
The ability of an economic actor (an individual, a household or a firm) to produce some particular good or service with a smaller total input of economic resources (labor, capital, land, etc.) per unit of output than other economic actors. In analyzing the theory of trade and economic specialization , it is important to distinguish absolute from comparative advantage , since it is comparative advantage that determines the potential welfare gains from specialization and trade, and not absolute advantage. [See also: comparative advantage ]
The ability of an economic actor (an individual, a household or a firm) to produce some particular good or service with a smaller total input of economic resources (labor, capital, land, etc.) per unit of output than other economic actors. In analyzing the theory of trade and economic specialization , it is important to distinguish absolute from comparative advantage , since it is comparative advantage that determines the potential welfare gains from specialization and trade, and not absolute advantage. [See also: comparative advantage ]
Absolute advantage Definition from Sports Dictionaries & Glossaries
| maritime&shipping&trade |
Absolute Advantage
An advantage of one nation or area over another in the costs of manufacturing an item in terms of used.
An advantage of one nation or area over another in the costs of manufacturing an item in terms of used.
Absolute advantage Definition from Encyclopedia Dictionaries & Glossaries
| Wikipedia English - The Free Encyclopedia |
Absolute advantage
A country has an absolute advantage over another in producing a good, if it can produce that good using less resources than another country. For example if one unit of labor in Scotland can produce 80 units of wool or 20 units of wine; while in Spain one unit of labor makes 50 units of wool or 75 units of wine, then Scotland has an absolute advantage in producing wool and Spain has an absolute advantage in producing wine. Scotland can get more wine with its labor by specializing in wool and trading the wool for Spanish wine, while Spain can benefit by trading wine for wool. (Adam Smith, Wealth of Nations, Book IV, Ch.2.) The benefits to nations from trading are the same as to individuals: trade permits specialization, which allows resources to be used more productively.
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