Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Absolute Advantage in Rice - Country A can produce more rice than Country B.
B
Comparative Advantage in Wheat - Country A has a lower opportunity cost for producing wheat.
C
No Advantage - Country A has no comparative or absolute advantage over Country B.
D
Comparative Advantage in Rice - Country A has a lower opportunity cost for producing rice.
Understanding the Answer
Let's break down why this is correct
Answer
To understand which category Country A belongs to regarding comparative advantage, we first look at the production possibilities of both countries. Country A can produce either 10 tons of rice or 5 tons of wheat, while Country B can produce 15 tons of rice or 10 tons of wheat. Country A has an opportunity cost of 2 tons of rice for every ton of wheat it produces, since giving up 10 tons of rice allows it to produce 5 tons of wheat. On the other hand, Country B has an opportunity cost of 1. 5 tons of rice for each ton of wheat.
Detailed Explanation
Country A gives up less when it produces rice. Other options are incorrect because Some might think Country A is better at making rice; This option suggests Country A is better at wheat.
Key Concepts
Comparative Advantage
Absolute Advantage
Opportunity Cost
Topic
Comparative and Absolute Advantage
Difficulty
medium level question
Cognitive Level
understand
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