Assume That the United States Could Produce 80 Million Loaves

Assume that the United States could produce 80 million loaves of bread if all its resources were devoted to bread production. If the United States used all its resources to produce milk, suppose it could produce 80 million gallons of milk. If Germany used all its resources to produce bread, suppose it could produce 40 million loaves of bread. Alternatively, if all its resources were used to produce milk, Germany could produce 20 million gallons of milk. Which of the following statements then is true?

A) Germany has a comparative advantage in producing milk.
B) The United States has a comparative advantage in producing bread.
C) The United States has a comparative advantage in producing both goods.
D) The United States has an absolute advantage in producing both goods.