Suppose that if the United States produced only oil,it could produce 25 million barrels,and if it produced only microchips it could produce 20 million chips.Suppose that if Mexico produced only oil,it could produce 16 million barrels,and if it produced only microchips,it could produce 8 million chips.Which of the following statements is then correct?
A) Mexico has a comparative advantage in producing both goods.
B) The United States has an absolute advantage over Mexico in producing both goods.
C) Mexico has an absolute advantage over the United States in producing both goods.
D) The United States has a comparative advantage in producing both goods.
Correct Answer:
Verified
Q189: If a country has few resources:
A) trade
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Q191: Use the following to answer questions
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Q192: Comparative advantage exists when one country can
Q193: Comparative advantage arises because:
A) all resources are
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Q197: Use the following to answer questions
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Q198: Use the following to answer questions
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Q199: Which of the following situations would MOST
Q205: Two countries will benefit from trade if
A)
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