Suppose that, given the same number of workers, the United States can produce twice as many televisions or 20 times as many potatoes as Chile. Which of the following statements is true?
A) Chile should make televisions and trade them to the United States in exchange for potatoes, because the United States has an absolute advantage in the production of potatoes.
B) Chile should make potatoes and trade them to the United States in exchange for televisions, because the United States has an absolute advantage in the production of potatoes.
C) The United States can benefit from trading with Chile, but Chile will receive no benefit.
D) The United States has an absolute advantage at producing both televisions and potatoes.

Question

Quizplus · Accepted Answer

The United States can produce both televisions and potatoes at a higher rate than Chile, indicating an absolute advantage in both goods.

Suppose That, Given the Same Number of Workers, the United