Figure 3-20
Canada's Production Possibilities Frontier
Mexico's Production Possibilities Frontier
-Refer to Figure 3-20.Canada has a comparative advantage in the production of
A)Good X and Mexico has a comparative advantage in the production of Good Y.
B)Good Y and Mexico has a comparative advantage in the production of Good X.
C)both goods and Mexico has a comparative advantage in the production of neither good.
D)neither good and Mexico has a comparative advantage in the production of both goods.

Question

Figure 3-20
Canada's Production Possibilities Frontier
Mexico's Production Possibilities Frontier  
-Refer to Figure 3-20.Canada has a comparative advantage in the production of
A)Good X and Mexico has a comparative advantage in the production of Good Y. 
B)Good Y and Mexico has a comparative advantage in the production of Good X. 
C)both goods and Mexico has a comparative advantage in the production of neither good. 
D)neither good and Mexico has a comparative advantage in the production of both goods.

Quizplus · Accepted Answer

Canada's production possibilities frontier has a steeper slope for Good X, indicating that they have a lower opportunity cost of producing Good X compared to Good Y. On the other hand, Mexico's production possibilities frontier has a steeper slope for Good Y, indicating that they have a lower opportunity cost of producing Good Y compared to Good X. Therefore, Canada has a comparative advantage in producing Good X and Mexico has a comparative advantage in producing Good Y.

Figure 3-20 Canada's Production Possibilities Frontier