$$\begin{array} { c c c }
& \text { One American Worker } & \text { One Italian Worker } \
\text { Beer } & 5 \mathrm { kegs } & 8 \mathrm { kegs } \
\text { Pizzas } & 10 & 12
\end{array}$$
-Italy has a comparative advantage in the production of
A)beer.
B)pizza.
C)both beer and pizza.
D)neither beer nor pizza.

Question

$$\begin{array} { c c c } 
& \text { One American Worker } & \text { One Italian Worker } \
\text { Beer } & 5 \mathrm { kegs } & 8 \mathrm { kegs } \
\text { Pizzas } & 10 & 12
\end{array}$$
-Italy has a comparative advantage in the production of
A)beer.
B)pizza.
C)both beer and pizza.
D)neither beer nor pizza.

Quizplus · Accepted Answer

Italy has a comparative advantage in beer because it produces more kegs per worker (8) compared to the American worker (5), indicating a lower opportunity cost in beer production. Comparative advantage is determined by who has the lower opportunity cost, not necessarily who produces more overall.

-Italy Has a Comparative Advantage in the Production of A)beer

-Italy Has a Comparative Advantage in the Production of
A)beer