Difference Between Widgets And Country B
A country has an absolute advantage over another country when one country can produce an item at less of an economic cost than the other. If country A can produce 10 widgets for every economic unit they input, while country B can only produce 5, country A has an absolute advantage in producing widgets. Country B may have an absolute advantage in producing sprockets, in this case country A should produce widgets and country B should produce sprockets and then the two country can trade with each other to meet each of their needs.
If country A could produce both widgets and sprockets more efficiently than country B at the following output per economic unit imputed:
Product Country A Country B
Widget 10 5
Sprocket 10 8
Country B would have
If country A could produce both widgets and sprockets more efficiently than country B at the following output per economic unit imputed:
Product Country A Country B
Widget 10 5
Sprocket 10 8
Country B would have