📚 Learning Guide
Comparative and Absolute Advantage
easy

If Country A has an absolute advantage in producing cars while Country B has a comparative advantage in producing cocoa, then Country A is to cars as Country B is to what?

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Learning Path
Learning Path

Question & Answer
1
Understand Question
2
Review Options
3
Learn Explanation
4
Explore Topic

Choose the Best Answer

A

Cocoa

B

Cars

C

Wheat

D

Electronics

Understanding the Answer

Let's break down why this is correct

Answer

If Country A has an absolute advantage in producing cars, it means that Country A can produce more cars than Country B using the same resources. On the other hand, Country B has a comparative advantage in producing cocoa, which means that it can produce cocoa at a lower opportunity cost compared to cars. This means that while Country A focuses on making cars, Country B should focus on cocoa because it can produce it more efficiently. So, if we say Country A is to cars, then Country B is to cocoa. This relationship shows how different countries can benefit from specializing in what they do best and trading with each other.

Detailed Explanation

Country B is best at making cocoa, just like Country A is best at making cars. Other options are incorrect because This option confuses the idea of who is best at what; Wheat is not mentioned in the question.

Key Concepts

Absolute Advantage
Comparative Advantage
International Trade
Topic

Comparative and Absolute Advantage

Difficulty

easy level question

Cognitive Level

understand

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