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Alternate Outputs from One Day's Labor Input: USA: 12 bushels of wheat or 3 yards of textiles. India: 3 bushels of wheat or 12 yards of textiles. From the data, the USA:________.

a) has an absolute advantage over India in the production of wheat.

b) should export textiles to India.

c) has an absolute advantage over India in the production of textiles.

d) has a comparative advantage in the production of textiles.

Respuesta :

Parrain

Answer: a) has an absolute advantage over India in the production of wheat.

Explanation:

When a country is said to have an Absolute advantage in the production of a commodity, it means that they can produce more of that commodity than the country being compared to given the same amount of resources, all else being equal.

Given one day's labor input, the US can produce 12 bushels of wheat while India can only manage 3 bushels. The United States therefore has an Absolute advantage in the production of Wheat than India.

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