Which of the following best defines absolute advantage?

Absolute advantage refers to the capability of an individual, company, or country to produce a greater quantity of a good or service than competitors with the same quantity of resources. This concept, introduced by economist Adam Smith, emphasizes efficiency in production rather than the relative cost of production.

When choosing the correct definition, it's important to focus on the idea of superior productivity with respect to a specific resource input. Under absolute advantage, one entity can produce more output than another due to factors such as better technology, skills, or efficiencies in production processes.

The other options do not accurately represent absolute advantage. For instance, the ability to produce at a lower opportunity cost pertains to comparative advantage, which is a different concept focusing on relative costs rather than raw output. Additionally, avoiding trade deficits and influencing exchange rates relate to international trade dynamics and monetary policy rather than the straightforward concept of production efficiency captured in absolute advantage.