In Canada, the average worker can produce 10 computers or 6 cars a year. In the United States, the average worker can produce 12 computers or 10 cars a year. Based on the given information, which statement is correct?

Question

Quizplus · Accepted Answer

The United States has an absolute advantage in both goods because its workers can produce more of both computers and cars than Canadian workers can in a year. The U.S. also has a comparative advantage in producing cars because it gives up fewer computers to produce an additional car compared to Canada (1.2 computers per car in the U.S. vs. 1.67 computers per car in Canada).

In Canada, the Average Worker Can Produce 10 Computers or 6