Assuming labor is the only resource and England has 60 man-hours (mhrs) and Portugal 180 mhrs of labor resource available for production, which country has the absolute advantage in wine? a) Portugal b) England c) Both d) Neither e) Can't tell wine9080708 8 8 8 8 860504030201000EnglandPPF10 20 30 40 5060clothwine908070605040302010001020PortugalPPF30 405060cloth

Answered: Assuming labor is the only resource and…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Assuming labor is the only resource and England has 60 man-hours (mhrs) and Portugal 180 mhrs of labor resource available for production, which country has the absolute advantage in wine?

		a) Portugal
		b) England
		c) Both
		d) Neither
		e) Can't tell

wine
90
80
70
8 8 8 8 8 8
60
50
40
30
20
10
0
0
England
PPF
10 20 30 40 50
60
cloth
wine
90
80
70
60
50
40
30
20
10
0
0
10
20
Portugal
PPF
30 40
50
60
cloth

Definition Video Definition Ability of a country to produce more output with a given level of input or to produce the same level of output with a lower level of input as compared to the other countries. For example, if Country A produces 200 units with the help of 10 units of labor, and Country B produces 300 units with 10 units of labor, Country A has an absolute advantage in the production of the good. Video

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Step 1: Define Absolute Advantage:

Absolute advantage refers to a condition where a country, individual, or entity can produce a particular good or service more efficiently and with fewer resources compared to others, allowing them to generate higher output or lower costs. It represents a competitive advantage based on inherent capabilities or technology.

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