Suppose that Iceland can produce 32 units of food per person per year or 16 units of clothing per person per year,but Lavaland can produce 24 units of food per person per year or 12 units of clothing per person per year.Which of the following statements is the most accurate?
A) Iceland has both a comparative and absolute advantage in producing food.
B) Iceland has comparative advantage, but not an absolute advantage, in producing food.
C) Lavaland has an absolute disadvantage, but not a comparative disadvantage, in producing clothing.
D) Lavaland has both a comparative and an absolute disadvantage in producing clothing.
Correct Answer:
Verified
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