Refer to Table 20.1. Which of the following statements is true? a. India has an
ID: 1198759 • Letter: R
Question
Refer to Table 20.1. Which of the following statements is true? a. India has an absolute advantage in the production of cloth but not wheat. b. India has an absolute advantage in the production of both wheat and cloth. c. The U.S. has an absolute advantage in the production of wheat but not cloth. d. The U.S. has an absolute advantage in the production of cloth but not wheat. e. The U.S. has an absolute advantage in the production of both wheat and cloth
The table below shows units of wheat and cloth produced by each worker per day in both the countries. Table 20.1 Country Good U.S India Wheat othExplanation / Answer
The correct answer is (e). The United States produces both the goods more efficiently than India. This implies that the United states has absolute advatage in the production of both the goods.