Mexico Is Capable of Producing 20 Auto Tires or 16

Multiple Choice

Mexico is capable of producing 20 auto tires or 16 microcircuits per labor hour. Brazil is capable of producing 24 auto tires or 24 microcircuits per labor hour. Based on this information, we can conclude that:

A) Brazil has an absolute advantage in both goods.
B) Brazil will export both goods to Mexico.
C) Mexico has a comparative advantage in tires.
D) Answers Brazil has an absolute advantage in both goods and Mexico has a comparative advantage in tires are both correct.
E) Answers Brazil has an absolute advantage in both goods, Brazil will export both goods to Mexico, and Mexico has a comparative advantage in tires are all correct.