Suppose that a worker in Country A can make either 10 iPhones or 5 iPads each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPhones or 10 iPads each year. Country B has 200 workers. Country B has a(n) _____ advantage at producing iPads, which means it should specialize in _____.
A) comparative; iPads
B) absolute; iPads
C) comparative; iPhones
D) absolute; iPhones

Question

Quizplus · Accepted Answer

Country B has a comparative advantage at producing iPads, meaning they have a lower opportunity cost in producing iPads compared to Country A. Therefore, Country B should specialize in producing iPads while Country A should specialize in producing iPhones.

Suppose That a Worker in Country a Can Make Either