Which of the following are the two steps a producer can take to gain an absolute advantage over another producer?

• A. Increase productivity and reduce resource usage
• B. Expand the production possibilities frontier and focus on opportunity cost
• C. Lower opportunity cost and increase comparative advantage
• D. Specialize in the production of one good and trade with others

Answer: (A)

Verified step by step guidance

1. Understand the concept of absolute advantage: it occurs when a producer can produce more output using the same amount of resources or the same output using fewer resources compared to another producer.
2. Recognize that to gain an absolute advantage, a producer must either increase productivity (produce more output per unit of input) or reduce resource usage (use fewer inputs to produce the same output).
3. Analyze the options given and identify which actions directly relate to increasing productivity or reducing resource usage, as these are the key ways to achieve absolute advantage.
4. Note that expanding the production possibilities frontier or focusing on opportunity cost relates more to comparative advantage rather than absolute advantage.
5. Conclude that the two steps a producer can take to gain an absolute advantage are to increase productivity and reduce resource usage.