Question

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

Answer 1

option B

Step-by-step 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.