Exhibit B-1 below shows the quantity of thing-a-ma-jigs or truffala fruit that can be produced by each country, if all of its resources are devoted to that product.

-In Exhibit B-1 Canary Island has a comparative advantage in the production of coconuts.

Question

Exhibit B-1 below shows the quantity of thing-a-ma-jigs or truffala fruit that can be produced by each country, if all of its resources are devoted to that product.
 
-In Exhibit B-1 Canary Island has a comparative advantage in the production of coconuts.

Quizplus · Accepted Answer

Comparative advantage occurs when a country can produce a good at a lower opportunity cost than another. If Exhibit B-1 shows that Canary Island can produce coconuts at a lower opportunity cost compared to other goods or compared to another country's production, then Canary Island has a comparative advantage in coconuts.

Exhibit B-1 Below Shows the Quantity of Thing-A-Ma-Jigs or Truffala