In Canada, the Average Worker Can Produce 10 Computers or 6

question 159

Multiple Choice

In Canada, the average worker can produce 10 computers or 6 cars a year. In the United States, the average worker can produce 12 computers or 10 cars a year. Based on the given information, which statement is correct?

• A) Canada has a comparative advantage in the production of cars.
• B) Canada has an absolute advantage in producing both goods.
• C) The United States has an absolute advantage in both goods, and a comparative advantage in producing cars.
• D) The United States has a comparative advantage in producing computers.

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Definitions:

Insight

The ability to understand the inner nature of things or to gain an intuitive understanding of complex situations.

Availability Heuristic

A mental shortcut that relies on immediate examples that come to a given person's mind when evaluating a specific topic, concept, method or decision.

Trial And Error

A problem-solving method that involves attempting different solutions and eliminating those that do not work.

Morphemes

The smallest units of meaning in a language.