Use the figure below to answer the following questions.
Table 2.3.1
The planets of Vulcan and Romulus each produce goods X and Y.
The following table gives points on their production possibilities frontiers.
-Refer to Table 2.3.1.Which one of the following is true?
A)Romulus has both an absolute advantage and a comparative advantage in the production of Y.
B)Romulus has both an absolute advantage and a comparative advantage in the production of X.
C)Vulcan has a comparative advantage in the production of X.
D)Romulus has a comparative advantage in the production of X.
E)Vulcan should specialize in the production of X.

Question

Use the figure below to answer the following questions.
Table 2.3.1
The planets of Vulcan and Romulus each produce goods X and Y.
The following table gives points on their production possibilities frontiers. 
-Refer to Table 2.3.1.Which one of the following is true?
A)Romulus has both an absolute advantage and a comparative advantage in the production of Y. 
B)Romulus has both an absolute advantage and a comparative advantage in the production of X. 
C)Vulcan has a comparative advantage in the production of X. 
D)Romulus has a comparative advantage in the production of X. 
E)Vulcan should specialize in the production of X.

Quizplus · Accepted Answer

Romulus has a lower opportunity cost of producing X than Vulcan (1 versus 2/3). Therefore, Romulus has a comparative advantage in the production of X. There is no information given about absolute advantage.

Use the Figure Below to Answer the Following Questions