-Assuming that opportunity costs are constant, which of the following is a correct statement? (See the above table.)
A)The United States has a comparative advantage in bicycle production.
B)The United States has a comparative advantage in producing both goods.
C)Mexico has a comparative advantage in producing bicycles.
D)Mexico has a comparative advantage in producing both goods.

Question

-Assuming that opportunity costs are constant, which of the following is a correct statement? (See the above table.)
A)The United States has a comparative advantage in bicycle production. 
B)The United States has a comparative advantage in producing both goods. 
C)Mexico has a comparative advantage in producing bicycles. 
D)Mexico has a comparative advantage in producing both goods.

Quizplus · Accepted Answer

Comparative advantage is determined by which country has the lower opportunity cost for producing a good. If opportunity costs are constant, Mexico having a comparative advantage in producing bicycles means it has a lower opportunity cost for bicycles compared to the United States.

-Assuming That Opportunity Costs Are Constant, Which of the Following