The Economist describes absolute advantage as the simplest yardstick of economic performance – if one person, firm or country can produce more of something with the same amount of effort and resources, they have an absolute advantage over other producers.
The Economist continues:
“Being the best at something does not mean that doing that thing is the best way to use your scarce economic resources. The question of what to specialise in – and how to maximise the benefits from international trade – is best decided according to comparative advantage. Both absolute and comparative advantage [see Comparative Advantage] may change significantly over time. as the study of how society uses its scarce resources.
Atlas topic, subject, and course
The Economist, Economics A-Z, at http://www.economist.com/economics-a-to-z/a#node-21529328, accessed 5 May 2016.
Page created by: Ian Clark, last modified 5 May 2016.