Refer to the information provided in Table 18.1 below to answer the questions that follow.
Table 18.1
-Refer to Table 18.1. Mexico has
A) a comparative advantage but not an absolute advantage in orange production.
B) a comparative advantage but not an absolute advantage in banana production.
C) an absolute advantage and a comparative advantage in banana production.
D) an absolute advantage and a comparative advantage in orange production.

Question

Refer to the information provided in Table 18.1 below to answer the questions that follow.
Table 18.1 
-Refer to Table 18.1. Mexico has
A) a comparative advantage but not an absolute advantage in orange production. 
B) a comparative advantage but not an absolute advantage in banana production. 
C) an absolute advantage and a comparative advantage in banana production. 
D) an absolute advantage and a comparative advantage in orange production.

Quizplus · Accepted Answer

According to the table, Mexico has a lower opportunity cost of producing oranges than the United States (0.33 vs 0.5), indicating an absolute advantage in orange production. Additionally, Mexico has a lower opportunity cost of producing bananas than the United States (0.5 vs 2), indicating a comparative advantage in banana production. Therefore, Mexico has an absolute advantage and a comparative advantage in orange production.

Refer to the Information Provided in Table 18