Country M enjoys absolute advantage over country N in the production of commodities X and Y, if country M
- is inefficient in the production of both commodities X and Y
-
is more efficient than country N in producing both commodities X and Y
- can produce only commodity Y cheaper than country N
- and country N are efficient in the production of both goods
The correct answer is: B
Explanation
Country M enjoys absolute advantage over country N in the production of commodities X and Y if country M is more efficient than country N in producing both commodities X and Y.
Absolute advantage refers to the ability of a country to produce a good or service using fewer resources than another country. In this case, country M is able to produce both commodities X and Y using fewer resources than country N. This means that country M can produce more of both commodities with the same amount of resources, or it can produce the same amount of both commodities with fewer resources.