The following diagrams show the production possibilities boundaries for Austria and Switzerland,for the production of bicycles and shoes. FIGURE 32-2 Refer to Figure 32-2.The diagrams illustrate that Switzerland

Question

The following diagrams show the production possibilities boundaries for Austria and Switzerland,for the production of bicycles and shoes.  FIGURE 32-2 Refer to Figure 32-2.The diagrams illustrate that Switzerland

Quizplus · Accepted Answer

The production possibilities boundary for Switzerland shows a steeper slope for bicycles, indicating that Switzerland has a lower opportunity cost for producing bicycles compared to shoes. Therefore, Switzerland has a comparative advantage in the production of bicycles over Austria. There is no information to indicate that Switzerland has an absolute advantage in the production of bicycles or shoes. There is also no information on consumption.

The Following Diagrams Show the Production Possibilities Boundaries for Austria