Below Is Some Hypothetical Data for the Countries of Canada

question 42

Multiple Choice

Below is some hypothetical data for the countries of Canada and Mexico.(Assume that Canada has 10 million workers per month available and Mexico has 20 million. )
Canada's Production Possibilities
(Output in millions of bushels per month)
Mexico's Production Possibilities
(Output in millions of bushels per month)
Output Before Trade
(Output in millions of bushels per month)

-Refer to the information above to answer this question.In what product does Canada and Mexico have a comparative advantage?

• A)Neither country has a comparative advantage in either rye or beans.
• B)Canada has a comparative advantage in rye but neither country has a comparative advantage in beans.
• C)Canada has a comparative advantage in rye and Mexico has a comparative advantage in beans.
• D)Canada has a comparative advantage in beans and Mexico has a comparative advantage in rye.

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Definitions:

Absolute Advantage

Absolute advantage refers to the ability of a country, company, or individual to produce a good or service more efficiently than competitors, using the same amount of resources.

Trade

The trading of goods, services, or a combination of both among two or more entities, domestically or across borders.

Comparative Advantage

The capability of a person, business, or nation to manufacture a product or provide a service with a smaller opportunity cost compared to rivals.

Absolute Advantage

The capability of a country, entity, or individual to produce a particular good or service more efficiently than others, using the same amount of resources.