absolute advantage theory

Discipline: Economics

Absolute advantage theory is introduced by the Scottish economist Adam Smith (1723-1790).

Absolute advantage theory asserts that a nation benefits from manufacturing more output than others since it is in the possession of a particular resource or commodity. This particular resource can also be a certain method or knowledge that increases the production efficiency, and thus reduces the relative need to resources.

Also See:

· comparative advantage theory
· comparative costs
· Heckscher-Ohlin trade theory
· technological gap theory

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