Suppose that,given the same number of workers,the United States can produce two times as many TVs or 20 times as many potatoes as Chile.Which of the following statements is true?
A)Chile should trade with the United States for potatoes because the United States has an absolute advantage in the production of potatoes.
B)Chile should trade with the United States for TVs because the United States has an absolute advantage in the production of potatoes.
C)The United States can benefit from trading TVs but not potatoes with Chile.
D)None of these statements is necessarily true.

Question

Quizplus · Accepted Answer

The United States has an absolute advantage in the production of both TVs and potatoes. Therefore, Chile should trade with the United States for both TVs and potatoes.

Suppose That,given the Same Number of Workers,the United States Can