Refer to the information provided in Figure 33.1 below to answer the question(s) that follow. Figure 33.1
-Refer to Figure 33.1. Which of the following statements is true?
A) The United States has both an absolute advantage and a comparative advantage in the production of soybeans and alfalfa.
B) The United States has an absolute advantage in the production of soybeans and alfalfa, but a comparative advantage only in the production of soybeans.
C) The United States has an absolute advantage in the production of soybeans and alfalfa, but a comparative advantage only in the production of alfalfa.
D) The United States has a comparative advantage in the production of both soybeans and alfalfa, but an absolute advantage only in the production of soybeans.

Question

Refer to the information provided in Figure 33.1 below to answer the question(s) that follow.  Figure 33.1
-Refer to Figure 33.1. Which of the following statements is true?
A) The United States has both an absolute advantage and a comparative advantage in the production of soybeans and alfalfa. 
B) The United States has an absolute advantage in the production of soybeans and alfalfa, but a comparative advantage only in the production of soybeans. 
C) The United States has an absolute advantage in the production of soybeans and alfalfa, but a comparative advantage only in the production of alfalfa. 
D) The United States has a comparative advantage in the production of both soybeans and alfalfa, but an absolute advantage only in the production of soybeans.

Quizplus · Accepted Answer

The United States has an absolute advantage in the production of both soybeans and alfalfa because it can produce more of both goods using the same amount of resources as South Korea. However, the United States only has a comparative advantage in the production of alfalfa because it has a lower opportunity cost of producing alfalfa compared to soybeans, while South Korea has a lower opportunity cost of producing soybeans compared to alfalfa. Therefore, the United States should specialize in producing alfalfa and trade with South Korea for soybeans to maximize overall production and consumption.

Refer to the Information Provided in Figure 33