based on the following information. A worker in the U.S. can produce either 5 machines per day or 15 yards of cloth. A worker in India can produce either 1 machine per day or 5 yards of cloth.
-Which of the following statements is true?
A) India has an absolute advantage in the production of machines.
B) The U.S. has an absolute advantage in neither machines nor cloth.
C) The U.S. has a comparative advantage in machines.
D) The U.S. has a comparative advantage in cloth.
E) The U.S. does not have a comparative advantage in either product.

Question

Quizplus · Accepted Answer

The U.S. has a comparative advantage in machines because it has a lower opportunity cost in producing machines compared to cloth. For the U.S., the opportunity cost of producing one machine is 3 yards of cloth (15 yards of cloth/5 machines), whereas for India, it is 5 yards of cloth (5 yards of cloth/1 machine). This means the U.S. gives up less cloth to produce a machine, indicating a comparative advantage in machine production.

Based on the Following Information