Absolute advantage is determined by

Question

a. actual differences in labor productivity between countries.

b. relative differences in labor productivity between countries.

c. Both A and B

d. Neither A nor B

Answer 1

A.

An absolute advantage in trade terms means that a nation has higher productivity in the production of a good.

Answer 2

d. Neither A nor B

"A" definition is not complete (quantity of labor and capital should be included too) - so right answer might be "A" too in some sense.