Suppose New Zealand uses one unit of labor to produce a kiwi and two units of labor to produce an apple. Suppose Australia uses two units of labor to produce a kiwi and one unit of labor to produce an apple. In this case, New Zealand:
A) has a comparative advantage in producing apples.
B) has a comparative advantage in producing kiwis.
C) has a comparative advantage in producing both goods.
D) does not have a comparative advantage in producing either good.
Correct Answer:
Verified
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