Absolute Advantage Between Two Countries
Assume that there are only two countries, Country A and Country B, producing only two goods: corn cereal and designer jeans. The following table shows the production possibilities for these two countries. Which of the following statements is correct?
A
Country A has an absolute advantage in the production of one good, but not both.
B
Country B has an absolute advantage in the production of both goods.
C
Country B has an absolute advantage in the production of one good, but not both.
D
Neither country has an absolute advantage in the production of these two goods.
E
Country A has an absolute advantage in the production of both goods.
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