Figure 16-6

-According to Figure 16-6,which of the following statements is correct?
A)Chile has the both the absolute and comparative advantage in the production of bicycles.
B)India has both the absolute and comparative advantage in the production of bicycles.
C)Chile has the absolute advantage in the production of wagons but India has the comparative advantage.
D)India has the absolute advantage in the production of bicycles but Chile has the comparative advantage.
E)India has the absolute advantage in the production of wagons but Chile has the comparative advantage.

Question

Figure 16-6
 
-According to Figure 16-6,which of the following statements is correct?
A)Chile has the both the absolute and comparative advantage in the production of bicycles. 
B)India has both the absolute and comparative advantage in the production of bicycles. 
C)Chile has the absolute advantage in the production of wagons but India has the comparative advantage. 
D)India has the absolute advantage in the production of bicycles but Chile has the comparative advantage. 
E)India has the absolute advantage in the production of wagons but Chile has the comparative advantage.

Quizplus · Accepted Answer

Chile has the absolute advantage in the production of bicycles because it can produce more bicycles with the same amount of resources than India. Chile also has the comparative advantage in the production of bicycles because it can produce bicycles at a lower opportunity cost than India.

Figure 16-6 -According to Figure 16-6,which of the Following Statements Is Correct