How to find productivity

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AP Macroeconomics › How to find productivity

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1

Country A can produce 10 cars or 5 computers. Country B can produce 6 cars or 4 computers.

Which country has the comparative advantage in producing computers?

Country B

CORRECT

Country A

0

Neither country has the comparative advantage in producing computers.

0

Impossible to determine

0

Explanation

Country B can produce 4 computers or 6 cars. , so Country B must give up 1.5 cars to make a computer. Country A can make 5 computers or 10 cars. , so Country A must give up producing 2 cars to make 1 computer.

2

Country A can produce 10 cars or 5 computers. Country B can produce 6 cars or 4 computers.

Which country has the absolute advantage in producing computers?

Country A

CORRECT

Country B

0

Neither country has the absolute advantage in producing computers.

0

Impossible to determine with the information given.

0

Explanation

Absolute advantage is determined by which country can produce more, regardless of efficiency. Country A can produce more computers than Country B, so it has the absolute advantage in producing computers.