Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. The opportunity cost of a pair of shoes is _____ for the United States than Canada, so Canada has a(n) _____ advantage at producing shoes.

Question

Quizplus · Accepted Answer

The opportunity cost of a pair of shoes in the United States is 5 apples (100 apples/20 shoes), while in Canada it is 2 apples (20 apples/10 shoes). Therefore, the opportunity cost is higher in the United States, giving Canada a comparative advantage in producing shoes.

Suppose an American Worker Can Make 20 Pairs of Shoes