Table 34-3 The data in Table 34-3 indicate that the United States has

Question

Table 34-3  The data in Table 34-3 indicate that the United States has

Quizplus · Accepted Answer

According to the data in Table 34-3, the United States has a lower opportunity cost of producing wheat (2/3) compared to Mexico (3/4) and a lower opportunity cost of producing cotton (4/3) compared to Mexico (5/4). This means that the United States has an absolute advantage in both goods, but also has a comparative advantage in wheat, since it has a lower opportunity cost of producing wheat relative to cotton compared to Mexico. Therefore, B is the correct choice.

Table 34-3 the Data in Table 34-3 Indicate That