In Adam Smith's trade model, labor is the only factor of production and the amount of labor used to produce a unit of output is the basis for the cost of the product. According to Smith's trade model in a two-nation, two-good world, a country has an absolute advantage in a product if the country
Question 1 options:
A)
produces the same amount of output per labor hour as the other country
B)
produce more output per labor hour than the other country
C)
produces less output per labor hour than the other country