The table given below shows the number of umbrellas and bushels of corn produced in the United Kingdom and the Rest of the World per labor hour. The United Kingdom has a comparative advantage in the production of _____. $$\begin{array} { l c c }
\hline\text { Productivity } & \text { In the United Kingdorn } & \text { In the Rest of the World } \
\hline \text { Umbrellas per labor hour } & 0.25 & 1 \
\text { Bushels of corn per labor hour } & 0.5 & 0.67\\hline
\end{array}$$
A)both the goods.
B)neither umbrella nor corn
C)only umbrella
D)only corn

Question

The table given below shows the number of umbrellas and bushels of corn produced in the United Kingdom and the Rest of the World per labor hour. The United Kingdom has a comparative advantage in the production of _____. $$\begin{array} { l c c } 
\hline\text { Productivity } & \text { In the United Kingdorn } & \text { In the Rest of the World } \
\hline \text { Umbrellas per labor hour } & 0.25 & 1 \
\text { Bushels of corn per labor hour } & 0.5 & 0.67\\hline
\end{array}$$
A)both the goods.
B)neither umbrella nor corn
C)only umbrella
D)only corn

Quizplus · Accepted Answer

The United Kingdom has a comparative advantage in the production of corn because it has a lower opportunity cost in producing corn compared to umbrellas. This is evident from the fact that the UK produces more bushels of corn per labor hour (0.5) compared to umbrellas (0.25), while the rest of the world is more efficient in producing umbrellas (1 per labor hour) than corn (0.67 per labor hour). Comparative advantage is determined by the relative efficiency of production, not by the absolute productivity.

The Table Given Below Shows the Number of Umbrellas and Bushels