Question

Suppose that a worker in Country A can make either 10 iPods or 5 tablets each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPods or 10 tablets each year. Country B has 200 workers. Country A has the absolute advantage in the production of:____________

Answer 1

Answer:

The answer is: Country A has the absolute advantage in the production of iPods.

Explanation:

First we need to calculate all the different possible outputs form each country.  

         

               Country A                                                Country B

10 iPods or 5 tablets per worker           2 iPods or 10 tablets per worker

Total workforce 100 workers                 Total workforce 200 workers

Total output 1,000 iPods or                   Total output 400 iPods or

500 tablets                                              2,000 tablets

Even though Country A´s workforce is half the size of Country B´s, it can produce 150% more iPods.