Question

Are differences in geography behind the differences in absolute advantages?

Short answer

Geography plays a most vital role in causing differences in absolute advantages.

Step-by-step solution

Step 1. Meaning of absolute advantage.

It is the ability of a party or individual, or firms, or country to produce a good or services more efficiently than its competitors.

Step 2. Role of geography in causing differences in absolute advantages.

Yes, geography does sometimes play a role in causing differences in absolute advantages. Absolute advantage in a term used when any country, in order to produce a good or services, makes use of fewer resources as compared to other countries. Thus, to a certain extent, greater natural resources or access to the seas can lead to absolute advantage for certain goods.

Step 3. Examples.

a) The United states has some of the richest farmland in the world, making it easier to grow corn and wheat.

b) Guatemala and Colombia have climates especially suited for growing coffee.