The first two columns give the maximum daily amounts of beer and whiskey that Southern Ireland and Northern Ireland can produce when they completely specialize in one or another product.The last two columns give each country's consumption without trade. $$\begin{array} { l c c c c c c }
& \begin{array} { c }
\text { Maxirnumn } \
\text { beer } \
\text { production }
\end{array} & \begin{array} { c }
\text { Maxirnum } \
\text { whiskey } \
\text { production }
\end{array} & \begin{array} { c }
\text { Beer consumption } \
\text { without trade }
\end{array} & \begin{array} { c }
\text { Beer consurnption } \
\text { without trade }
\end{array} \
\begin{array} { l }
\text { Northem } \
\text { Irelard } \
\text { Southem }
\end{array} & 500 \mathrm { kegs } & 1500 \mathrm { kegs } & 300 \mathrm { kegs } & 600 \text { bottles } \
\text { Ireland } & 1200 \mathrm { kegs } & \mathbf { 8 0 0 } \mathrm { kegs } & 600 \mathrm { kegs } & 400 \text { bottles }
\end{array}$$ In which product does Northern Ireland have a comparative advantage in producing?
A)Beer
B)Whiskey
C)Neither
D)Both

Question

The first two columns give the maximum daily amounts of beer and whiskey that Southern Ireland and Northern Ireland can produce when they completely specialize in one or another product.The last two columns give each country's consumption without trade. $$\begin{array} { l c c c c c c } 
& \begin{array} { c } 
\text { Maxirnumn } \
\text { beer } \
\text { production }
\end{array} & \begin{array} { c } 
\text { Maxirnum } \
\text { whiskey } \
\text { production }
\end{array} & \begin{array} { c } 
\text { Beer consumption } \
\text { without trade }
\end{array} & \begin{array} { c } 
\text { Beer consurnption } \
\text { without trade }
\end{array} \
\begin{array} { l } 
\text { Northem } \
\text { Irelard } \
\text { Southem }
\end{array} & 500 \mathrm { kegs } & 1500 \mathrm { kegs } & 300 \mathrm { kegs } & 600  \text { bottles } \
\text { Ireland } & 1200 \mathrm { kegs } & \mathbf { 8 0 0 } \mathrm { kegs } & 600 \mathrm { kegs } & 400 \text { bottles }
\end{array}$$ In which product does Northern Ireland have a comparative advantage in producing?
A)Beer
B)Whiskey
C)Neither
D)Both

Quizplus · Accepted Answer

Comparative advantage refers to the ability of a country or region to produce a particular good or service at a lower opportunity cost than another country or region. In this case, Northern Ireland can produce 1500 kegs of whiskey, whereas Southern Ireland can only produce 500 kegs. Thus, Northern Ireland has a comparative advantage in producing whiskey as it can produce it at a lower opportunity cost than Southern Ireland.

The First Two Columns Give the Maximum Daily Amounts of Beer