Refer to the information provided in Table 33.1 below to answer the question(s) that follow.
Table 33.1
-Refer to Table 33.1. Guatemala has
A) a comparative advantage in orange production.
B) an absolute advantage in orange production.
C) an absolute advantage in banana production.
D) a comparative advantage in banana production.

Question

Refer to the information provided in Table 33.1 below to answer the question(s) that follow.
Table 33.1 
-Refer to Table 33.1. Guatemala has
A) a comparative advantage in orange production. 
B) an absolute advantage in orange production. 
C) an absolute advantage in banana production. 
D) a comparative advantage in banana production.

Quizplus · Accepted Answer

Comparative advantage is determined by calculating the opportunity cost of producing a product. In Guatemala, the opportunity cost of producing bananas is lower than the opportunity cost of producing oranges. Therefore, Guatemala has a comparative advantage in banana production.

Refer to the Information Provided in Table 33