Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day.On the other hand,a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day.The opportunity cost of a pair of shoes is __________ for the United States than Canada,so Canada has the ______________ advantage in shoe production.

Question

Quizplus · Accepted Answer

The opportunity cost of a pair of shoes is lower for the American worker because they can produce 20 pairs of shoes instead of 10 like the Canadian worker. Therefore, the United States has the absolute advantage in shoe production. However, when we compare the opportunity cost of producing shoes between the two countries, Canada has a lower opportunity cost in terms of the number of apples they can produce instead. This means Canada has the comparative advantage in shoe production.

Suppose an American Worker Can Make 20 Pairs of Shoes