Table 3-21
Assume that Jamaica and Norway can switch between producing coolers and producing radios at a constant rate. The following table shows the number of coolers or number of radios each country can produce in one day.
-Refer to Table 3-21. Jamaica has a comparative advantage in the production of
A)coolers and Norway has a comparative advantage in the production of radios.
B)radios and Norway has a comparative advantage in the production of coolers.
C)both goods and Norway has a comparative advantage in the production of neither good.
D)neither good and Norway has a comparative advantage in the production of both goods.

Question

Table 3-21
Assume that Jamaica and Norway can switch between producing coolers and producing radios at a constant rate. The following table shows the number of coolers or number of radios each country can produce in one day. 
-Refer to Table 3-21. Jamaica has a comparative advantage in the production of
A)coolers and Norway has a comparative advantage in the production of radios. 
B)radios and Norway has a comparative advantage in the production of coolers. 
C)both goods and Norway has a comparative advantage in the production of neither good. 
D)neither good and Norway has a comparative advantage in the production of both goods.

Quizplus · Accepted Answer

Jamaica can produce 2 radios or 1 cooler in a day, while Norway can produce 2 coolers or 1 radio in a day. In terms of opportunity cost, Jamaica has to give up 2 coolers to produce 1 radio, while Norway has to give up only 1 cooler to produce 1 radio. Therefore, Norway has a lower opportunity cost of producing radios and hence a comparative advantage in radio production. On the other hand, Jamaica has to give up only 0.5 radios to produce 1 cooler, while Norway has to give up 2 radios to produce 1 cooler. Therefore, Jamaica has a lower opportunity cost of producing coolers and hence a comparative advantage in cooler production.

Table 3-21 Assume That Jamaica and Norway Can Switch Between Producing Coolers