Say that Alland can produce 32 units of food per person per year or 16 units of clothing per person per year, but Georgeland can produce 24 units of food per year or 12 units of clothing. Which of the following is true?

Question

Quizplus · Accepted Answer

CA) Alland has an absolute advantage in both food (32 units vs. 24 units) and clothing (16 units vs. 12 units) production compared to Georgeland, meaning it can produce more of both goods with the same resources. However, the statement does not provide information about trade intentions, so the part about not trading is not relevant to the determination of absolute advantage.C) Georgeland does not have an absolute advantage in producing clothing; Alland does, as it can produce more clothing per person per year (16 units vs. 12 units). Therefore, this statement is incorrect. Georgeland cannot have a comparative advantage in clothing if Alland has an absolute advantage in both goods without further information on opportunity costs.

Say That Alland Can Produce 32 Units of Food Per