Reference: Ref 2-4 (Figure: PPF Mexico & U.S.) Use the above figure in which both Mexico and the United States each have 24 units of labor. Mexico has a comparative advantage in ______ and the United States has a comparative advantage in ______.
A) computers; shirts
B) shirts; computers
C) computers; computers
D) shirts; shirts

Question

Reference: Ref 2-4 (Figure: PPF Mexico & U.S.) Use the above figure in which both Mexico and the United States each have 24 units of labor. Mexico has a comparative advantage in ______ and the United States has a comparative advantage in ______.
A) computers; shirts 
B) shirts; computers 
C) computers; computers 
D) shirts; shirts

Quizplus · Accepted Answer

According to the figure, Mexico can produce 12 shirts or 2 computers with 1 unit of labor while the United States can produce 6 shirts or 6 computers with 1 unit of labor. Therefore, Mexico has a comparative advantage in producing shirts and the United States has a comparative advantage in producing computers.