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Question & Answer
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Country A produces 10 tons of rice and 20 tons of wheat, Country B produces 5 tons of rice and 15 tons of wheat.
Country A produces 15 tons of rice and 5 tons of wheat, Country B produces 10 tons of rice and 10 tons of wheat.
Country A produces 20 tons of rice and 10 tons of wheat, Country B produces 30 tons of rice and 20 tons of wheat.
Country A produces 5 tons of rice and 25 tons of wheat, Country B produces 10 tons of rice and 20 tons of wheat.
Understanding the Answer
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The first country can produce rice with fewer sacrificed wheat than the second country, so its opportunity cost of rice is lower. Other options are incorrect because People often think the country that makes more of everything has an advantage, but that is absolute advantage; This option shows a country with more overall production, but the trade‑off between goods is not examined.
Key Concepts
Production Advantage
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Deep Dive: Production Advantage
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Definition
Production Advantage refers to a country's ability to produce goods more efficiently than another country. Absolute Advantage is when one country can produce more of both goods, while Comparative Advantage is when a country has a lower opportunity cost in producing a particular good. Understanding production advantages helps countries specialize in goods where they are most efficient, leading to overall economic growth.
Topic Definition
Production Advantage refers to a country's ability to produce goods more efficiently than another country. Absolute Advantage is when one country can produce more of both goods, while Comparative Advantage is when a country has a lower opportunity cost in producing a particular good. Understanding production advantages helps countries specialize in goods where they are most efficient, leading to overall economic growth.
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