-Using the above figure determine which country has the comparative advantage in the production of corn. In addition, determine which has the comparative advantage in the production of barley.

Question

Quizplus · Accepted Answer

The Answer is The United States has the comparative advantage in the production of barley. The reason is that the opportunity cost to the United States for producing one bushel of barley is one bushel of corn. By contrast, Mexico's opportunity cost of one bushel of barley is two bushels of corn. Since the opportunity cost of producing one bushel of corn in Mexico is one-half of a bushel of barley that gives Mexico the comparative advantage in the production of corn.

-Using the Above Figure Determine Which Country Has the Comparative