Reference: Ref 2-1 (Table: iPhone and iPod Production) According to the table on iPhone and iPod Production, which of the following is TRUE about Canadian and U.S. comparative advantages?
A) Canada has a comparative advantage in producing both iPhones and iPods.
B) The United States has a comparative advantage in producing both iPhones and iPods.
C) Canada has a comparative advantage in producing iPhones, and the United States has a comparative advantage in producing iPods.
D) Canada has a comparative advantage in producing iPods, and the United States has a comparative advantage in producing iPhones.

Question

Reference: Ref 2-1 (Table: iPhone and iPod Production) According to the table on iPhone and iPod Production, which of the following is TRUE about Canadian and U.S. comparative advantages?
A) Canada has a comparative advantage in producing both iPhones and iPods. 
B) The United States has a comparative advantage in producing both iPhones and iPods. 
C) Canada has a comparative advantage in producing iPhones, and the United States has a comparative advantage in producing iPods. 
D) Canada has a comparative advantage in producing iPods, and the United States has a comparative advantage in producing iPhones.

Quizplus · Accepted Answer

According to the table, Canada has a lower opportunity cost of producing iPhones (5 iPods) compared to the United States (10 iPods), suggesting that Canada has a comparative advantage in producing iPhones. Similarly, the United States has a lower opportunity cost of producing iPods (0.5 iPhones) compared to Canada (1 iPhone), suggesting that the United States has a comparative advantage in producing iPods. Therefore, the correct option is C, where Canada has a comparative advantage in producing iPhones, and the United States has a comparative advantage in producing iPods.

Reference: Ref 2-1 (Table: IPhone and IPod Production) According to the Table