AP Micro & MacroCore Economic Concepts
Absolute Advantage
Absolute advantage is the ability of a party to produce a greater amount of a good or service than other parties using the same amount of resources.
A party has an absolute advantage if it can produce a good or service more efficiently than another party. This concept is used to explain why countries engage in international trade - they specialize in producing goods for which they have an absolute advantage and trade for other goods. Absolute advantage differs from comparative advantage, which looks at opportunity costs rather than just efficiency.
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