Answered: If France is said to have 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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If France is said to have an absolute advantage over Mexico in the production of wheat, this means that, given the same resources,

Mexico must have an absolute advantage in producing some good other than wheat.

a. France can produce more wheat than Mexico.

b. France has an absolute advantage in all goods that are complements to wheat.

c. France must have an absolute advantage over Mexico in producing all goods.

d. Mexico must have a comparative advantage over France in the production of wheat.

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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