The United States requires 20 hours of labor to produce 1 ton of steel and 30 hours of labor to produce 1,000 board feet of lumber. In Canada, 20 hours of labor are required to produce 1 ton of steel and 25 hours of labor to produce 1,000 board feet of lumber. Which country has an absolute advantage in the production of steel?
A) the United States
B) Canada
C) Neither the United States nor Canada has an absolute advantage.
D) Both the United States and Canada have an absolute advantage.

Question

Quizplus · Accepted Answer

Neither the United States nor Canada has an absolute advantage in the production of steel because both require the same amount of labor (20 hours) to produce 1 ton of steel.

The United States Requires 20 Hours of Labor to Produce