📚 Learning Guide
Absolute and Comparative Advantage
easy

If Country A can produce 10 units of wheat and 5 units of cloth with the same resources that Country B uses to produce 6 units of wheat and 4 units of cloth, which country has an absolute advantage in producing wheat?

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Learning Path
Learning Path

Question & Answer
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Choose the Best Answer

A

Country A

B

Country B

C

Neither country

D

Both countries

Understanding the Answer

Let's break down why this is correct

Answer

Country A has an absolute advantage in producing wheat because it can produce more units than Country B using the same resources. Specifically, Country A can produce 10 units of wheat, while Country B can only produce 6 units. This means that Country A is more efficient in wheat production because it yields more output from the same amount of resources. For example, if both countries use the same amount of land and labor, Country A's ability to produce 10 units shows it has a clear advantage. Therefore, when comparing their production capabilities, Country A is better at making wheat than Country B.

Detailed Explanation

Country A can make more wheat than Country B using the same resources. Other options are incorrect because Some might think Country B is better because it also makes wheat; This choice suggests both countries are equal in wheat production.

Key Concepts

Production possibilities frontier
Topic

Absolute and Comparative Advantage

Difficulty

easy level question

Cognitive Level

understand

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