-Refer to Table 3-6. Which country has an absolute or comparative advantage in each product?
A) Denmark has an absolute advantage in bread, and Italy has a comparative advantage in bread.
B) Denmark has an absolute advantage in bread, and Italy has a comparative advantage in neither good.
C) Denmark has an absolute advantage in cheese, and Italy has a comparative advantage in both goods.
D) Denmark has an absolute advantage in both goods, and Italy has a comparative advantage in cheese.

Question

-Refer to Table 3-6. Which country has an absolute or comparative advantage in each product?
A) Denmark has an absolute advantage in bread, and Italy has a comparative advantage in bread. 
B) Denmark has an absolute advantage in bread, and Italy has a comparative advantage in neither good. 
C) Denmark has an absolute advantage in cheese, and Italy has a comparative advantage in both goods. 
D) Denmark has an absolute advantage in both goods, and Italy has a comparative advantage in cheese.

Quizplus · Accepted Answer

Denmark has an absolute advantage in both goods if it can produce more of both bread and cheese than Italy. Italy has a comparative advantage in cheese if it has a lower opportunity cost of producing cheese compared to Denmark.