Multiple Choice
Consider two nations, country A and country B, that produce goods X and Y. The production possibility frontiers for the two nations are graphed with units of good Y measured vertically and units of good X measured horizontally. At the two nation-s current points along their frontiers, the slope of a tangent line is steeper for country A than for country B. We can conclude that:
A) country A has an absolute advantage in producing good X.
B) country B has an absolute advantage in producing good X.
C) country A has a comparative advantage in producing good X.
D) country B has a comparative advantage in producing good X.
Correct Answer:
Verified
Correct Answer:
Verified
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