Consider the following information about the production of two goods, X and Y, in two countries, A and B:
∙ In Country A it takes Xa units of resources to produce one unit of X and Ya units of resources to produce one unit of Y.
∙ In Country B it takes Xb units of resources to produce one unit of X and Yb units of resources to produce one unit of Y.
∙ Assume the amount of resources used to produce the goods in the two countries can be compared unambiguously.
TABLE 32-1
-Refer to Table 32-1. Country A has an absolute advantage in producing good X if
A) Xa/Ya) is less than Xb/Yb) .
B) Xa is less than Xb.
C) Xa is less than Ya.
D) Xa/Xb) is less than Ya/Yb) .
E) Xa = Xb.
Correct Answer:
Verified
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