Use the figure below to answer the following questions.
Table 2.4.1
The planets of Vulcan and Romulus each produce goods X and Y.
The following table gives points on their production possibilities frontiers.

-Refer to Table 2.4.1. Which one of the following is true?
A)Romulus has both an absolute advantage and a comparative advantage in the production of Y.
B)Romulus has both an absolute advantage and a comparative advantage in the production of X.
C)Vulcan has a comparative advantage in the production of X.
D)Romulus has a comparative advantage in the production of X.
E)Vulcan should specialize in the production of X.

Question

Use the figure below to answer the following questions.
Table 2.4.1
The planets of Vulcan and Romulus each produce goods X and Y.
The following table gives points on their production possibilities frontiers.
 
-Refer to Table 2.4.1. Which one of the following is true?
A)Romulus has both an absolute advantage and a comparative advantage in the production of Y. 
B)Romulus has both an absolute advantage and a comparative advantage in the production of X. 
C)Vulcan has a comparative advantage in the production of X. 
D)Romulus has a comparative advantage in the production of X. 
E)Vulcan should specialize in the production of X.

Quizplus · Accepted Answer

Romulus has an absolute advantage in both X and Y because it can produce more of both goods than Vulcan. Romulus also has a comparative advantage in X because it has a lower opportunity cost of producing X, meaning it gives up less of Y to produce more X compared to Vulcan.

Use the Figure Below to Answer the Following Questions