Assume that Germany can produce 10 million bottles of beer or 4 million bottles of vodka. Further assume that Russia can produce 7 million bottles of beer or 3 million bottles of vodka. As a result, which of the following is true with regard to absolute and comparative advantage?
a. Germany has the absolute advantage in beer and the comparative advantage in beer.
b. Germany has the absolute advantage in beer and the comparative advantage in vodka.
c. Russia has the absolute advantage in beer and the comparative advantage in beer.
d. Russia has the absolute advantage in beer and the comparative advantage in vodka.
a
You might also like to view...
Jack was unemployed two weeks ago but just started a new job. As a result of this increase in the number of employed workers, which of the following occurred?
A) The labor force participation rate increased. B) The unemployment rate increased. C) The labor force participation rate decreased. D) The unemployment rate decreased.
Jessie's demand schedule for candy bars indicates
A. Why she likes candy bars. B. How much she likes candy bars. C. How many candy bars she will actually buy. D. Her opportunity cost of buying candy bars.