Use the following to answer question:
-(Table: The Production Possibilities for Tractors and Crude Oil)Use Table: The Production Possibilities for Tractors and Crude Oil.The United States has a comparative advantage in _____,and Mexico has a comparative advantage in _____.

Question

Use the following to answer question: 
-(Table: The Production Possibilities for Tractors and Crude Oil)Use Table: The Production Possibilities for Tractors and Crude Oil.The United States has a comparative advantage in _____,and Mexico has a comparative advantage in _____.

Quizplus · Accepted Answer

Comparative advantage is determined by which country can produce a good at a lower opportunity cost. Without specific numbers, the general principle is that if the U.S. can produce tractors more efficiently (with less sacrifice of producing crude oil) than Mexico, it has a comparative advantage in tractors. Conversely, if Mexico can produce crude oil more efficiently (with less sacrifice of producing tractors) than the U.S., it has a comparative advantage in crude oil.

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