Exhibit 33-5

-Refer to Exhibit 33-5. Country 1 has a comparative advantage in the production of __________, and country 2 has a comparative advantage in the production of __________.

Question

Exhibit 33-5
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-Refer to Exhibit 33-5. Country 1 has a comparative advantage in the production of __________, and country 2 has a comparative advantage in the production of __________.

Quizplus · Accepted Answer

Comparative advantage is determined by which country can produce a good at a lower opportunity cost. Without seeing Exhibit 33-5, the principle is that if Country 1 can produce good A with less sacrifice of producing good B compared to Country 2, then Country 1 has a comparative advantage in good A. Conversely, if Country 2 can produce good B with less sacrifice of producing good A compared to Country 1, then Country 2 has a comparative advantage in good B.

Exhibit 33-5 ​

Exhibit 33-5