Figure 3-11
The graph below represents the various combinations of ham and cheese (in pounds) that the nation of Bonovia could produce in a given month.

-Refer to Figure 3-11.The nation of Cropitia has a comparative advantage over Bonovia in producing ham if
A) Cropitia can produce more than 400 pounds of ham per month.
B) Cropitia can produce more than 320 pounds of cheese per month.
C) Cropitia's opportunity cost of producing a pound of ham is less than 0.8 pounds of cheese.
D) Cropitia's opportunity cost of producing a pound of ham is greater than 0.8 pounds of cheese.

Question

Figure 3-11
The graph below represents the various combinations of ham and cheese (in pounds) that the nation of Bonovia could produce in a given month.
 
-Refer to Figure 3-11.The nation of Cropitia has a comparative advantage over Bonovia in producing ham if
A) Cropitia can produce more than 400 pounds of ham per month. 
B) Cropitia can produce more than 320 pounds of cheese per month. 
C) Cropitia's opportunity cost of producing a pound of ham is less than 0.8 pounds of cheese. 
D) Cropitia's opportunity cost of producing a pound of ham is greater than 0.8 pounds of cheese.

Quizplus · Accepted Answer

Cropitia has a comparative advantage over Bonovia in producing ham if its opportunity cost of producing a pound of ham is less than Bonovia's. From the graph, we can see that for Cropitia to produce one pound of ham it has to give up 0.8 pounds of cheese (the slope of its production possibility frontier). Therefore, if Bonovia's opportunity cost of producing a pound of ham is more than 0.8 pounds of cheese, then Cropitia has a comparative advantage in producing ham.

Figure 3-11 the Graph Below Represents the Various Combinations of Ham and Ham