1. The ability to produce a unit of a product using fewer resources than any another producer.
2. A country has an absolute advantage if its output per unit of input of all goods and services produced is greater than that of another country.

If one person, firm, or country can produce more of something with the same amount of effort and resources, they have an absolute advantage over other producers.

The question of what to specialize in and how to maximize the benefits from international trade is determined according to comparative advantage that identifies which activities a country, firm, or individual is most efficient at doing. Both absolute and comparative advantages may change significantly over time.