Suppose an American Worker Can Make 20 Pairs of Shoes

question 31

Multiple Choice

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day.On the other hand,a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day.Which of the following statements is true?

• A) The United States has a comparative advantage in the production of shoes.
• B) Canada has a comparative advantage in the production of shoes.
• C) Comparative advantage doesn't exist in this scenario.
• D) Both countries have a comparative advantage in the production of shoes.

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Definitions:

Automobile Industry

The global industry involved in the design, development, manufacturing, marketing, and selling of motor vehicles.

Cost-Leadership Strategy

A competitive strategy focusing on producing goods or services at the lowest cost to outprice competitors.

Differentiation Strategy

A generic business strategy that requires products to have significant points of difference to charge a higher price while targeting a broad array of market segments.

Significant Points

Major or important aspects, factors, or considerations in a given context, such as key arguments in a discussion or essential features of a project.