Answered: B. Neither Country has an absolute…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Refer to the graph for the following questions.

1. Which country has the absolute advantage in production of Good A?

A. Country Y

B. Neither Country has an absolute advantage of producing Good A.

C. Country X

2. Which Country has the comparative advantage in production of Good A?

A. Neither Country has a comparative advantage in producing Good A.

B. Country X

C. Country Y

3. Which Country has the com advantage in production of Good B?

A. Country X

B. Country Y

C. Neither country has a comparative advantage in producing Good B.

75
COUNTRY X
COUNTRY Y
50
100
75
GOOD B
GOOD A

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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