(3. B) efly explain absolute and comparative advantages in trade, as well as opportunity cost Then, oriefly describe how comparative advantage leads to economic growth (4 points)

bsolute advantage refers to the ability of a country or individual to produce a good or service more efficiently than another country or individual. This means that they can produce the good or service using fewer resources or at a lower cost. For example, if Country A can produce 10 units of a good using 5 hours of labor, while Country B can produce the same 10 units using 10 hours of labor, then Country A has an absolute advantage in the production of that good.<br /><br />Comparative advantage, on the other hand, refers to the ability of a country or individual to produce a good or service at a lower opportunity cost than another country or individual. Opportunity cost is the value of the next best alternative that is given up when a choice is made. For example, if Country A can produce either 10 units of Good X or 5 units of Good Y, and Country B can produce either 8 units of Good X or 4 units of Good Y, then Country A has a comparative advantage in the production of Good Y, while Country B has a comparative advantage in the production of Good X.<br /><br />Comparative advantage leads to economic growth by promoting specialization and trade between countries. When countries specialize in the production of goods and services in which they have a comparative advantage, they can trade with other countries to obtain the goods and services they do not produce as efficiently. This allows countries to consume more goods and services than they would be able to produce on their own, leading to an increase in overall economic welfare.<br /><br />Furthermore, comparative advantage also encourages countries to invest in industries in which they have a comparative advantage, leading to increased productivity and economic growth. As countries become more specialized in certain industries, they can achieve economies of scale, which can lead to lower costs of production and increased competitiveness in the global market.<br /><br />In summary, absolute and comparative advantages in trade, as well as opportunity cost, are important concepts in economics that explain how countries can benefit from specialization and trade. Comparative advantage leads to economic growth by promoting specialization, increasing productivity, and encouraging investment in industries in which countries have a comparative advantage.