Scenario: Norway and Sweden each produce cloudberries (CB) and salted cod (SC). Their production possibilities curves for these two goods are shown below.

Production Possibilities: Norway and Sweden (thousands of kilos)

Opportunity Costs: Norway and Sweden

-Refer to the scenario above.________ has the comparative advantage in producing cloudberries,while ________ has the comparative advantage in producing salted cod.

Question

Scenario: Norway and Sweden each produce cloudberries (CB) and salted cod (SC). Their production possibilities curves for these two goods are shown below.
  
Production Possibilities: Norway and Sweden (thousands of kilos)
  
Opportunity Costs: Norway and Sweden
 
-Refer to the scenario above.________ has the comparative advantage in producing cloudberries,while ________ has the comparative advantage in producing salted cod.

Quizplus · Accepted Answer

Comparative advantage is determined by which country can produce a good at a lower opportunity cost. If Sweden has a lower opportunity cost for producing cloudberries and Norway has a lower opportunity cost for producing salted cod, then Sweden has the comparative advantage in cloudberries and Norway in salted cod.

Scenario: Norway and Sweden Each Produce Cloudberries (CB) and Salted