Practice prompt · Q:economics-and-market-foundations/compare-absolute-advantage-001

Compare absolute advantage on a common basis

Identify which producer can make more of each output with the same modeled resource without substituting opportunity cost for productivity.

Updated Aug 7, 2026 Review due Nov 7, 2026

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In one comparable analyst-day, Rowan can complete at most 12 reconciliations or 6 forecasts; Vale can complete at most 4 reconciliations or 4 forecasts. Which absolute-advantage conclusion follows from those supplied quantities?

Choose the best answer. a Rowan has absolute advantage in both outputs because, with one comparable analyst-day, Rowan's maxima of 12 and 6 exceed Vale's maxima of 4 and 4. b Vale has absolute advantage in forecasts because Vale has comparative advantage in forecasts. c Neither producer can have absolute advantage in both outputs because advantage must always be split.

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Answer: a

Choice a. Rowan has absolute advantage in both outputs on the common one-day, common-quality basis. This does not imply Rowan has comparative advantage in both.