Table 3-5
Assume that Falda and Varick can switch between producing wheat and producing cloth at a constant rate.
-Refer to Table 3-5.Falda has an absolute advantage in the production of
A)wheat.
B)cloth.
C)both goods.
D)neither good.

Question

Table 3-5
Assume that Falda and Varick can switch between producing wheat and producing cloth at a constant rate. 
-Refer to Table 3-5.Falda has an absolute advantage in the production of
A)wheat. 
B)cloth. 
C)both goods. 
D)neither good.

Quizplus · Accepted Answer

Falda has a lower opportunity cost of producing wheat than cloth, so it has an absolute advantage in producing wheat.

Table 3-5 Assume That Falda and Varick Can Switch Between Producing Wheat