Suppose that a worker in Country A can make either 10 iPods or 5 tablets each year.Country A has 100 workers.Suppose a worker in Country B can make either 2 iPods or 10 tablets each year.Country B has 200 workers.Country B would be using resources efficiently if they were producing:
A) (200 iPods, 1,750 tablets).
B) (200 iPods, 1,500 tablets).
C) (200 iPods, 1,000 tablets).
D) (200 iPods, 750 tablets).

Question

Quizplus · Accepted Answer

In order to use resources efficiently, Country B should specialize in producing the product in which it has a comparative advantage. 
Country B has a comparative advantage in producing tablets because a worker in Country B can produce 10 tablets while a worker in Country A only produces 5 tablets. 
Therefore, Country B should produce tablets and allocate all 200 workers to producing tablets. 
With 200 workers, Country B can produce 2000 tablets per year. 
However, their production of iPods with 200 workers will only be 400 (200 workers × 2 iPods per worker), which is much less efficient. 
Therefore, the best choice would be (200 iPods, 1,000 tablets).

Suppose That a Worker in Country a Can Make Either