Q58Suppose Spain is currently producing 90 units of wine and 10 units of cheese, but to produce 10 more units of cheese it must sacrifice 30 units of wine. Further, suppose that Portugal produces 45 units of wine and 45 units of cheese, but to produce 10 more units of cheese it must sacrifice only 10 units of wine. It can be concluded that...a.More information is needed to conclude anything about comparative advantage in either country.b.Portugal has an absolute advantage in wine production and Spain has an absolute advantage in cheese production.c.Spain has a comparative advantage in the production of wine and Portugal has a comparative advantage in the production of cheese.d.Spain has an absolute advantage in both wine and cheese production.e.Portugal has an absolute advantage in both wine and cheese production.

Answer: To produce 10 more units of cheese Spain sacrifices 30 units of wine. So the opportunity…

Answered: Q58 Suppose Spain is currently…

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter33: International Trade

Section: Chapter Questions

Problem 2SCQ: Brazil can produce 100 pounds of beef or 10 autos. In contrast the United States can produce 40...

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Q58

Suppose Spain is currently producing 90 units of wine and 10 units of cheese, but to produce 10 more units of cheese it must sacrifice 30 units of wine. Further, suppose that Portugal produces 45 units of wine and 45 units of cheese, but to produce 10 more units of cheese it must sacrifice only 10 units of wine. It can be concluded that...

More information is needed to conclude anything about comparative advantage in either country.

Portugal has an absolute advantage in wine production and Spain has an absolute advantage in cheese production.

Spain has a comparative advantage in the production of wine and Portugal has a comparative advantage in the production of cheese.

Spain has an absolute advantage in both wine and cheese production.

Portugal has an absolute advantage in both wine and cheese production.

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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