Suppose that Captain Canada can produce 100 hockey sticks or 10 gallons of maple syrup in a typical work week, while Captain Germany can produce 90 hockey sticks or 10 gallons of maple syrup in a typical work week.From these numbers, we can conclude
A)Captain Canada has a comparative advantage in the production of hockey sticks.
B)Captain Germany has a comparative advantage in the production of maple syrup.
C)Captain Canada has an absolute advantage in the production of hockey sticks.
D)All of the above conclusions are correct.

Question

Quizplus · Accepted Answer

Captain Canada has an absolute advantage in both goods because he can produce more of each than Captain Germany with the same amount of resources. However, Captain Canada has a comparative advantage in hockey sticks because he gives up less maple syrup to produce an additional hockey stick compared to Captain Germany. Conversely, Captain Germany has a comparative advantage in maple syrup because he gives up fewer hockey sticks to produce an additional gallon of maple syrup compared to Captain Canada. Therefore, all of the statements are correct.

Suppose That Captain Canada Can Produce 100 Hockey Sticks or 10