The question asks to evaluate statements regarding the Theory of Absolute Cost Advantage and identify the correct ones.

Theory of Absolute Cost Advantage Analysis

This theory, often attributed to Adam Smith, explains international trade based on countries having an absolute advantage in producing certain goods due to lower production costs. This cost difference arises from variations in resource availability and productivity.

Statement Evaluation

• Statement (i): Productive efficiency differed among different countries because of diversity in natural and acquired resources possessed by them. This statement is correct. The theory fundamentally relies on the idea that differences in resource endowments (both natural and acquired) lead to varying levels of productive efficiency across nations.
• Statement (ii): The difference in natural advantage manifests in varying climate, quality of land, availability of minerals, water and other resources. This statement is correct. It accurately identifies key components of natural resources that contribute to absolute advantage. For example, a country with favorable climate and fertile land has an absolute advantage in agriculture.
• Statement (iii): The difference in acquired resources manifests in different levels of technology and skills available. This statement is correct. Acquired resources, such as advanced technology and skilled labor, significantly impact a country's ability to produce goods efficiently, forming another basis for absolute advantage.

Conclusion

Since all three statements (i), (ii), and (iii) correctly explain the underlying reasons for differences in productive efficiency as per the Theory of Absolute Cost Advantage, the correct option is the one stating that all statements are correct.