Refer to the information provided in Table 33.1 below to answer the question(s) that follow.
Table 33.1
-Refer to Table 33.1. Mexico has
A) a comparative advantage but not an absolute advantage in orange production.
B) a comparative advantage but not an absolute advantage in banana production.
C) an absolute advantage and a comparative advantage in banana production.
D) an absolute advantage and a comparative advantage in orange production.

Question

Refer to the information provided in Table 33.1 below to answer the question(s) that follow.
Table 33.1 
-Refer to Table 33.1. Mexico has
A) a comparative advantage but not an absolute advantage in orange production. 
B) a comparative advantage but not an absolute advantage in banana production. 
C) an absolute advantage and a comparative advantage in banana production. 
D) an absolute advantage and a comparative advantage in orange production.

Quizplus · Accepted Answer

According to Table 33.1, Mexico has a lower opportunity cost of producing oranges compared to Brazil (2/4 vs. 4/8) and a lower opportunity cost of producing bananas compared to Belize (1/3 vs. 3/6). This means that Mexico has a comparative advantage in both orange and banana production. Additionally, Mexico also has an absolute advantage in both orange and banana production as it has the lowest cost of production for both goods compared to the other countries listed in the table. Therefore, the best choice is D - Mexico has an absolute advantage and a comparative advantage in orange production.

Refer to the Information Provided in Table 33