-Using the data in the above table and assuming constant opportunity costs, it is correct to state that
A) the United States has an absolute advantage in producing cloth.
B) Mexico has a comparative advantage in producing food.
C) the United States has a comparative advantage in producing both food and cloth.
D) Mexico has a comparative advantage in producing both food and cloth.

Question

-Using the data in the above table and assuming constant opportunity costs, it is correct to state that
A) the United States has an absolute advantage in producing cloth. 
B) Mexico has a comparative advantage in producing food. 
C) the United States has a comparative advantage in producing both food and cloth. 
D) Mexico has a comparative advantage in producing both food and cloth.

Quizplus · Accepted Answer

Comparative advantage is determined by the opportunity cost of producing goods. If Mexico has a lower opportunity cost for producing food compared to the United States, then Mexico has a comparative advantage in producing food.

-Using the Data in the Above Table and Assuming Constant