Figure 2.7 Figure 2.7 shows the production possibility frontiers for Pakistan and Indonesia.Each country produces two goods, cotton and cashews.
-Refer to Figure 2.7.Which country has a comparative advantage in the production of cashews?

Question

Figure 2.7  Figure 2.7 shows the production possibility frontiers for Pakistan and Indonesia.Each country produces two goods, cotton and cashews.
-Refer to Figure 2.7.Which country has a comparative advantage in the production of cashews?

Quizplus · Accepted Answer

Comparative advantage is determined by which country can produce a good at a lower opportunity cost. If Pakistan can produce cashews at a lower opportunity cost than Indonesia, then Pakistan has the comparative advantage in cashew production.

Figure 27 Figure 2