An automobile company has two factories, one in Vietnam and one in Australia, each with the same number of workers. The Vietnamese factory can produce either 150 engines or 100 transmissions per day. The Australian factory can produce either 200 engines or 150 transmissions per day. A. Which factory has an advantage is irrelevant since the theory of comparative advantage only applies to countries, not companies. OB. The Australian factory has an comparative advantage in the production of transmissions. OC. The Vietnamese factory has an absolute advantage producing both engines and transmissions. D. The Vietnamese factory has a comparative advantage in the production of transmissions.

An automobile company has two factories, one in Vietnam and one in Australia, each with the same number of workers. The Vietnamese factory can produce either 150 engines or 100 transmissions per day. The Australian factory can produce either 200 engines or 150 transmissions per day. A. Which factory has an advantage is irrelevant since the theory of comparative advantage only applies to countries, not companies. OB. The Australian factory has an comparative advantage in the production of transmissions. OC. The Vietnamese factory has an absolute advantage producing both engines and transmissions. D. The Vietnamese factory has a comparative advantage in the production of transmissions.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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