Australia has an absolute advantage over South Africa in wool production if, during a year, Australia:

Question

can produce more wool than South Africa.

specialises in wool production.

can produce less wool than South Africa

can produce more wool than South Africa with a given amount of resources.

Answer 1

Australia has an absolute advantage over South Africa in wool production if it can produce more wool than South Africa with a given amount of resources.

Absolute advantage refers to the ability of a country to produce more of a good or service than another country using the same amount of resources. Thus, the correct option is:

can produce more wool than South Africa with a given amount of resources.