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24 October, 10:47

Country A can produce either 2 tons of cocoa or 4 cars with 10 units of labor a Country B can produce either 5 tons of cocoa or 25 cars with 10 units of labor, based on this information which of the following is true

A) Country A has an absolute advantage in the production of Cocoa, while Country B has a comparative advantage in the production of Cocoa

B) Country A has a comparative advantage in the production of Cocoa, while Country B has a comparative advantage in the production of cars

C) country A has an absolute advantage in the production of Cocoa. While country an has a comparative advantage in the production of cars

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  1. 24 October, 13:59
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    option B

    Explanation:

    The correct answer is option B

    Country A can produce 2 ton of Cocoa or 4 cars with 10 unit labor.

    Country B can produce 4 ton of cocoa or 25 cars in 10 units of labor.

    so, production of Cocoa in company B has a comparative advantage.

    While Cars production has a comparative advantage in Company B.

    Comparative advantage is the advantage between the given options like cocoa and cars.
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