Question 1 (1 point) In Canada, the average worker can produce 10 computers or s
ID: 1220944 • Letter: Q
Question
Question 1 (1 point)
In Canada, the average worker can produce 10 computers or six cars a year. In the United States, the average worker can produce 12 computers or 10 cars a year. Thus:
Question 1 options:
Canada has a comparative advantage in producing both goods.
Canada has a comparative advantage in the production of computers.
the United States has a comparative advantage in producing both goods.
the United States has a comparative advantage in the production of computers.
Canada has a comparative advantage in producing both goods.
Canada has a comparative advantage in the production of computers.
the United States has a comparative advantage in producing both goods.
the United States has a comparative advantage in the production of computers.
Explanation / Answer
The opportunity cost of producing computer in canada is 0.6 car while the opportunity cost of producing computer in the US is 0.83 car. Therefore, canada has a comparative advantage in the production of computers.
The opportunity cost of producing car in canada is 1.66 computer while in the US it is 1.2. So the cost is less in the US. Therefore, the US has a comparative advantage in the production of cars.
Option B is the answer.