Use the following to answer questions:
Figure: Steel and Lumber
-(Figure: Steel and Lumber) In the PPF diagram, the United States has a comparative advantage in ______ and an absolute advantage in ______.
A) both goods; both goods
B) steel; lumber
C) steel; both goods
D) lumber; steel

Question

Use the following to answer questions:
Figure: Steel and Lumber 
-(Figure: Steel and Lumber) In the PPF diagram, the United States has a comparative advantage in ______ and an absolute advantage in ______.
A) both goods; both goods 
B) steel; lumber 
C) steel; both goods 
D) lumber; steel

Quizplus · Accepted Answer

The United States has a comparative advantage in steel if it can produce steel at a lower opportunity cost than lumber. An absolute advantage in both goods means it can produce more of both goods than another country.

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