If the U.S. can produce pizza for $5 each and barrels of beer for $25 each, and Germany can produce pizza for $7 each and barrels of beer for $21 each, then the U.S. has

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Quizplus · Accepted Answer

The U.S. has a lower opportunity cost (5/25 = 0.2) for producing beer compared to Germany (21/7 = 3). However, the U.S. also has a lower opportunity cost (5/1 = 5) for producing pizza compared to Germany (7/1 = 7). This means that the U.S. has a comparative advantage in producing pizza, as it can produce pizza at a lower opportunity cost than Germany.

If the US Can Produce Pizza for $5 Each and Barrels of Barrels