Use the following to answer questions :
-(Table: Wheat and Aluminum) Look at the table Wheat and Aluminum. The United States and Germany can produce both wheat and aluminum. The table shows the maximum annual output combinations of wheat and aluminum that can be produced. Based on the table:
A)the United States has a comparative advantage in wheat and an absolute advantage in wheat.
B)Germany has an absolute advantage in aluminum and a comparative advantage in wheat.
C)the United States has a comparative advantage in both aluminum and wheat.
D)Germany has a comparative advantage in aluminum and an absolute advantage in aluminum.

Question

Use the following to answer questions : 
-(Table: Wheat and Aluminum) Look at the table Wheat and Aluminum. The United States and Germany can produce both wheat and aluminum. The table shows the maximum annual output combinations of wheat and aluminum that can be produced. Based on the table:
A)the United States has a comparative advantage in wheat and an absolute advantage in wheat. 
B)Germany has an absolute advantage in aluminum and a comparative advantage in wheat. 
C)the United States has a comparative advantage in both aluminum and wheat. 
D)Germany has a comparative advantage in aluminum and an absolute advantage in aluminum.

Quizplus · Accepted Answer

The United States has a comparative advantage in wheat if it can produce wheat at a lower opportunity cost than Germany. An absolute advantage in wheat means the U.S. can produce more wheat than Germany with the same resources.

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