based on the following information. A worker in the U.S. can produce either 10 chips or 20 sodas per day. A worker in Mexico can produce either 20 chips or 60 sodas per day.
-Which of the following is true?
A) The U.S. has an absolute advantage in the production of chips.
B) The U.S. has a comparative advantage in the production of sodas.
C) The U.S. has an absolute advantage in the production of sodas.
D) The U.S. has a comparative advantage in the production of chips.
E) Neither country has a comparative advantage in chips.

Question

Quizplus · Accepted Answer

The U.S. has a comparative advantage in the production of chips because it has a lower opportunity cost for producing chips compared to Mexico. The opportunity cost of producing 1 chip in the U.S. is 2 sodas, while in Mexico it is 3 sodas.

Based on the Following Information