Answered: Which country has the absolute…

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter3: Interdependence And The Gains Rrom Trade

Section3.2: Comparative Advantage: The Driving Force Of Specialization

Problem 2QQ

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Country A Country B

No. of pencils 100 50

produced

pounds of paper

produced 150 150

a)Country A and Country B can both produce paper and pencils, according to the table above and using the same amount of time and resources. Which country has the absolute advantage in producing each good?

choices

Country A has absolute advantage in pencils, but neither country has absolute advantage in paper

Country A has absolute advantage in both

Country B has absolute advantage in both

Country B has absolute advantage in paper, but Country A has absolute advantage in pencils

Neither country has absolute advantage in either good

Definition Video Definition Ability of a country to produce more output with a given level of input or to produce the same level of output with a lower level of input as compared to the other countries. For example, if Country A produces 200 units with the help of 10 units of labor, and Country B produces 300 units with 10 units of labor, Country A has an absolute advantage in the production of the good. Video

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