Use the following to answer question(s): The Production of Tires and Radios

-(Exhibit: The Production of Tires and Radios) Assuming constant costs in the neighborhood of their current levels of production, the exhibit shows the number of tires each country would have to forgo in order to produce the additional radios indicated.Further assume that the only input is labor and that it remains fully employed.We see from the table that Country Y:

Question

Use the following to answer question(s): The Production of Tires and Radios
 
-(Exhibit: The Production of Tires and Radios) Assuming constant costs in the neighborhood of their current levels of production, the exhibit shows the number of tires each country would have to forgo in order to produce the additional radios indicated.Further assume that the only input is labor and that it remains fully employed.We see from the table that Country Y:

Quizplus · Accepted Answer

The exhibit shows that Country Y would have to forgo a greater number of tires in order to produce the same amount of radios as Country X. This indicates that Country X has a comparative advantage in the production of radios, while Country Y has a comparative advantage in the production of tires. However, there is no information provided in the exhibit that indicates which country has an absolute advantage in either good. Therefore, neither A nor B can be the correct choice. Option D can also be eliminated because it implies that Country Y has an absolute advantage in the production of radios, which is not evident from the exhibit.

Use the Following to Answer Question(s): the Production of Tires