Use the following to answer questions :
-(Table: Comparative Advantage I) Look at the table Comparative Advantage I. Sweden has an absolute advantage in producing:
A)cell phones only.
B)herring only.
C)both cell phones and herring.
D)neither cell phones nor herring.

Question

Use the following to answer questions : 
-(Table: Comparative Advantage I) Look at the table Comparative Advantage I. Sweden has an absolute advantage in producing:
A)cell phones only. 
B)herring only. 
C)both cell phones and herring. 
D)neither cell phones nor herring.

Quizplus · Accepted Answer

Sweden has a lower opportunity cost of producing herring (2/3 cell phones) compared to Germany (3/4 cell phones), indicating a comparative advantage in producing herring. However, Sweden has a higher opportunity cost of producing cell phones (3/2 herring) compared to Germany (4/3 herring), indicating a comparative disadvantage in producing cell phones. Therefore, Sweden has an absolute advantage in producing neither cell phones nor herring.

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