Reference: Ref 2-8 (Table: Production in the United States and Germany) According to the table, which of the following statements is true?
A) The United States has a comparative advantage in clocks.
B) Germany has an absolute advantage in clocks and sofas.
C) The United States has a comparative advantage in sofas.
D) The United States has a comparative advantage in clocks and sofas.

Question

Reference: Ref 2-8 (Table: Production in the United States and Germany) According to the table, which of the following statements is true?
A) The United States has a comparative advantage in clocks. 
B) Germany has an absolute advantage in clocks and sofas. 
C) The United States has a comparative advantage in sofas. 
D) The United States has a comparative advantage in clocks and sofas.

Quizplus · Accepted Answer

According to the table, the United States has a comparative advantage in sofas, as it can produce more sofas at a lower opportunity cost compared to Germany. There is no information in the table to indicate the presence of an absolute advantage for either country in any of the listed products, so options A and B can be eliminated. Option D is also incorrect, as the table does not indicate a comparative advantage for the US in clocks.