Use the production possibilities data below for Avokia and Baldonia to answer the following question(s).
Table 2-2

-Refer to Table 2-2.Which of the following is correct?

Question

Use the production possibilities data below for Avokia and Baldonia to answer the following question(s).
Table 2-2

-Refer to Table 2-2.Which of the following is correct?

Quizplus · Accepted Answer

Comparative advantage refers to a country's ability to produce a good at a lower opportunity cost than another country. In this case, Avokia has a lower opportunity cost for producing apples (1/3 orange) compared to Baldonia (1/2 orange), but Baldonia has a lower opportunity cost for producing oranges (2 apples) compared to Avokia (3 apples). Thus, Baldonia has the comparative advantage in oranges.

Use the Production Possibilities Data Below for Avokia and Baldonia