Refer to the information provided in Figure 18.1 below to answer the questions that follow. Figure 18.1
-Refer to Figure 18.1. Which of the following statements is true?
A) The United States has both an absolute advantage and a comparative advantage in the production of soybeans and alfalfa.
B) The United States has an absolute advantage in the production of soybeans and alfalfa, but a comparative advantage only in the production of soybeans.
C) The United States has an absolute advantage in the production of soybeans and alfalfa, but a comparative advantage only in the production of alfalfa.
D) The United States has a comparative advantage in the production of both soybeans and alfalfa, but an absolute advantage only in the production of soybeans.

Question

Refer to the information provided in Figure 18.1 below to answer the questions that follow.  Figure 18.1
-Refer to Figure 18.1. Which of the following statements is true?
A) The United States has both an absolute advantage and a comparative advantage in the production of soybeans and alfalfa. 
B) The United States has an absolute advantage in the production of soybeans and alfalfa, but a comparative advantage only in the production of soybeans. 
C) The United States has an absolute advantage in the production of soybeans and alfalfa, but a comparative advantage only in the production of alfalfa. 
D) The United States has a comparative advantage in the production of both soybeans and alfalfa, but an absolute advantage only in the production of soybeans.

Quizplus · Accepted Answer

According to the information provided in Figure 18.1, the United States has a higher productivity level (absolute advantage) in the production of both soybeans and alfalfa compared to Mexico. However, when it comes to the opportunity cost of producing soybeans versus alfalfa, the United States has a lower opportunity cost of producing alfalfa than producing soybeans. This means that the United States has a comparative advantage in the production of alfalfa, but not in the production of soybeans. Therefore, choice C is the correct statement, as it states that the United States has an absolute advantage in the production of both soybeans and alfalfa, but a comparative advantage only in the production of alfalfa.

Refer to the Information Provided in Figure 18