Question

Easy!! 30 points!!

Two countries produce coal and iron. Country A can produce a maximum of
500 tons of coal per day or 250 tons of iron. Country B can produce a
maximum of 900 tons of coal per day or 300 tons of iron. Which statement
best describes this situation?
A. Country A has an absolute advantage producing coal.
B. Country B has a comparative advantage producing iron.
C. Country A has an absolute advantage producing iron.
D. Country B has a comparative advantage producing coal.

Answer 1

Answer:

Country B has a comparative advantage producing coal.

Explanation:

I believe this is correct, if not let me know and I will fix it. I'm sorry in advance if it is incorrect.

Answer 2

In the situation as given above, the country B has an added comparative advantage of producing coal.

What is a comparative advantage?

An advantage that an individual or a group has over the other in terms of its capacities and capabilities, generally measured in quantitative terms, is known as a comparative advantage.

Here, Country B produces 300 tons of coal as against 250 tons of coal produced by Country A, and thus it holds a comparative advantage over the Country A.

Hence, option D holds true regarding the comparative advantage of country B over country A.

Learn more about comparative advantage here:

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