Scenario: Consider two economies, Beta and Zeta. Each farmer in Beta can grow 1,000 pounds of apples or 500 pounds of oranges in a year. Each farmer in Zeta can grow 400 pounds of apples or 1,200 pounds of oranges in a year.
-Refer to the scenario above.Which of the following statements is true in this case?

Question

Quizplus · Accepted Answer

Zeta has a comparative advantage in producing oranges because it sacrifices less in terms of apples foregone to produce oranges compared to Beta. Zeta also has an absolute advantage in producing oranges because it can produce more oranges than Beta with the same resources.

Scenario: Consider Two Economies, Beta and Zeta