Suppose workers in Freecia can produce two bushels of rice with the same amount of effort it takes them to produce one memory chip.Workers in Warmia can produce five bushels of rice with the same effort it takes them to produce two memory chips.Which of the following must be true?

Question

Quizplus · Accepted Answer

In Freecia, 1 memory chip costs 2 bushels of rice. In Warmia, 1 memory chip costs 2.5 bushels of rice. Freecia therefore has a comparative advantage in producing memory chips.

Suppose Workers in Freecia Can Produce Two Bushels of Rice