Which country has the absolute advantage in the production of apple? Using the absolute advantage theory, if…

Question

Which country has the absolute advantage in the production of apple? Using the absolute advantage theory, if the two countries where to specialized and trade, which country should specialize in which product and trade for what product?

ScanSolve AI Tutor · Accepted Answer

Here are the answers to your questions.

Briefly explain how a country will have a comparative advantage over another country.

A country has a comparative advantage in producing a good or service if it can produce that good or service at a lower opportunity cost than another country. This means it gives up less of other goods to produce that specific good.

f. Refer to the diagram below to answer the questions

(i) Which country has the absolute advantage in the production of apple?

Identify the maximum production of apples for each country.
The United States can produce 500 apples. Mexico can produce 300 apples.
Compare the maximum production.
Since 500 apples (US) > 300 apples (Mexico), the United States has the absolute advantage in apple production. The country with the absolute advantage in the production of apple is $\boxed{\text{United States}}$.
- (ii) Using the absolute advantage theory, if the two countries were to specialize and trade, which country should specialize in which product and trade for what product?

Determine the absolute advantage for each product.

*   **Apples:** United States (500) > Mexico (300). The US has the absolute advantage in apples.
*   **Oranges:** United States (300) < Mexico (1200). Mexico has the absolute advantage in oranges.

Apply the absolute advantage theory for specialization and trade.
According to the absolute advantage theory, each country should specialize in the product where it has an absolute advantage. The **United States** should specialize in producing **apples** and trade for oranges. **Mexico** should specialize in producing **oranges** and trade for apples.
Calculate the opportunity involved in producing. L. Apples for PNG. (2)

This question is incomplete as "PNG" is not defined in the context of the provided diagrams, and there is no specific production scenario given for "Apples for PNG". Please provide more information for this question.

Which country has the absolute advantage in the production of apple? Using the absolute advantage theory, if the two countries where to specialized and trade, which country should specialize in which product and trade for what product?

Step-by-step solution

Identify the maximum production of apples for each country.

Compare the maximum production.

Determine the absolute advantage for each product.

Apply the absolute advantage theory for specialization and trade.

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