Answered: Table 1 shows the production…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Table 1 shows the production possibilities for the USA and Mexico.

Table 1

	Output per hour worked
Country	Computers	Shoes
USA	3	6 pairs
Mexico	1	3

Based on Table 1, which country or countries has an absolute advantage and a comparative advantage in shoes?

Group of answer choices

Mexico has an absolute and comparative advantage in shoes.

The United States has a comparative advantage, and Mexico has an absolute advantage in shoes.

Mexico has a comparative advantage, and the United States has an absolute advantage in shoes.

There is not enough information to tell.

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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