Exhibit 28-2 Karl can produce either 10 tons of oranges or 5 tons of apples in a year,while Adam can produce either 5 tons of oranges or 10 tons of apples.
Refer to Exhibit 28-2.Which of the following is true?

Question

Quizplus · Accepted Answer

Karl can produce more oranges and apples than Adam, indicating Karl has an absolute advantage in both goods. However, Karl's opportunity cost of producing one ton of oranges is 0.5 tons of apples (10/5) while Adam's opportunity cost of producing one ton of oranges is 2 tons of apples (5/10). Therefore, Adam has a comparative advantage in apples and Karl has a comparative advantage in oranges.

Exhibit 28-2 Karl Can Produce Either 10 Tons of Oranges