Figure 2-13 Figure 2-13 shows the production possibilities frontiers for Costa Rica and Guatemala. Each country produces two goods, pineapples and coconuts.
-Refer to Figure 2-13. If the two countries have the same amount of resources and the same technological knowledge, which country has an absolute advantage in the production of both pineapples and coconuts?

Question

Figure 2-13  Figure 2-13 shows the production possibilities frontiers for Costa Rica and Guatemala. Each country produces two goods, pineapples and coconuts.
-Refer to Figure 2-13. If the two countries have the same amount of resources and the same technological knowledge, which country has an absolute advantage in the production of both pineapples and coconuts?

Quizplus · Accepted Answer

If both countries have the same resources and technological knowledge, neither country would have an absolute advantage in producing both goods. Absolute advantage is determined by the ability to produce more of a good with the same resources, which is not possible if both countries are identical in these aspects.

Figure 2-13 Figure 2-13 Shows the Production Possibilities Frontiers