Firm B has a comparative advantage in butter, and absolut Firm B has a comparative advantage in butter, and absolute Firm B has a comparative advantage in butter, and absolute Firm A has a comparative advantage in jam, and an absolut

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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Please give me correct answer and full explanation otherwise i give downvote Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism. Answer completely and accurate answer. Rest assured, you will receive an upvote if the answer is accurate.
1. There are two firms, firms A and B. Suppose that the two firms both produce Jam and butter and sell them for the same price. Shown below are the combinations of the
two goods each firm can produce using the same amounts of labor and capital. Using the information below, which answer provides the most accurate depiction of
comparative advantage and absolute advantage?
Exhibit 1
Firm A
Firm B
Jam
Butter
Jam
Butter
120
0
100
20
90
20
80
40
60
40
60
60
30
60
40
80
0
80
20
100
0
Firm B has a comparative advantage in butter, and absolute advantage in jam.
Firm B has a comparative advantage in butter, and absolute advantage in jam.
Firm B has a comparative advantage in butter, and absolute advantage in jam.
Firm A has a comparative advantage in jam, and an absolute advantage in jam.
Transcribed Image Text:1. There are two firms, firms A and B. Suppose that the two firms both produce Jam and butter and sell them for the same price. Shown below are the combinations of the two goods each firm can produce using the same amounts of labor and capital. Using the information below, which answer provides the most accurate depiction of comparative advantage and absolute advantage? Exhibit 1 Firm A Firm B Jam Butter Jam Butter 120 0 100 20 90 20 80 40 60 40 60 60 30 60 40 80 0 80 20 100 0 Firm B has a comparative advantage in butter, and absolute advantage in jam. Firm B has a comparative advantage in butter, and absolute advantage in jam. Firm B has a comparative advantage in butter, and absolute advantage in jam. Firm A has a comparative advantage in jam, and an absolute advantage in jam.
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