Absolute advantage is determined by a actual differences in labor productivity between countries. This concept, introduced by Adam Smith, explains how countries benefit from specializing in the production of goods where they can produce more efficiently than others. For instance, if Country A can produce 10 units of a good with the same amount of resources that Country B uses to produce only 5 units, Country A has an absolute advantage in producing that good.
While relative differences in labor productivity, as mentioned in option b, are important, they pertain more towards comparative advantage, which considers the opportunity cost of production. Absolute advantage strictly focuses on the actual efficiency in production without involving opportunity costs.
Thus, the correct answer is a.