With one unit of resources each, Country A can produce sixty automobiles or six airplanes and Country B can produce sixty automobiles or four airplanes. Country A has a comparative advantage over Country B in the production of:

Question

Quizplus · Accepted Answer

Country A has a comparative advantage in producing airplanes because it gives up fewer automobiles to produce one airplane compared to Country B (10 automobiles per airplane for Country A vs. 15 automobiles per airplane for Country B). Comparative advantage is determined by the opportunity cost of producing one good over another.

With One Unit of Resources Each, Country a Can Produce