Consider a two-country, two-commodity model. The table given below shows the units of good X and good Y produced in country A and country B per labor hour. Country B has an absolute advantage in the production of: $$\begin{array} { | c | c | c | }
\hline \text { Productivity } & \text { Country A } & \text { Country B } \
\hline \text { Good X } & 1.00 & 0.50 \
\hline \text { Good Y } & 0.20 & 0.70 \
\hline
\end{array}$$
A)neither good X nor good Y.
B)both good X and good Y.
C)only good X.
D)only good Y.

Question

Consider a two-country, two-commodity model. The table given below shows the units of good X and good Y produced in country A and country B per labor hour. Country B has an absolute advantage in the production of: $$\begin{array} { | c | c | c | } 
\hline \text { Productivity } & \text { Country A } & \text { Country B } \
\hline \text { Good X } & 1.00 & 0.50 \
\hline \text { Good Y } & 0.20 & 0.70 \
\hline
\end{array}$$
A)neither good X nor good Y.
B)both good X and good Y.
C)only good X.
D)only good Y.

Quizplus · Accepted Answer

Country B has an absolute advantage in the production of good Y because it produces more units of good Y per labor hour (0.70) compared to country A (0.20).

Consider a Two-Country, Two-Commodity Model A)neither Good X nor Good Y