Suppose Spain Is Currently Producing 90 Units of Wine and 10

question 120

Multiple Choice

Suppose Spain is currently producing 90 units of wine and 10 units of cheese,but to produce 10 more units of cheese it must sacrifice 30 units of wine.Further,suppose that Portugal produces 45 units of wine and 45 units of cheese,but to produce 10 more units of cheese it must sacrifice only 10 units of wine.What is the pattern of absolute advantage between Spain and Portugal?

• A)Portugal has an absolute advantage in both wine and cheese production.
• B)Portugal has an absolute advantage in wine production and Spain has an absolute advantage in cheese production.
• C)Spain has an absolute advantage in both wine and cheese production.
• D)Neither country has an absolute advantage in the production of either wine or cheese.
• E)More information is needed to conclude anything about absolute advantage in either country.

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