GAIN FROM TRADE: THE THEORY OF COMPARATIVE ADVANTAGE

Umbra produces cars and bikes and similarly, their rival company BMX does. However, BMX dominates in terms of producing both products. Umbra claims it has a comparative advantage in producing cars than BMX.

Based on the below table you are required to justify the Umbras claim.

Company Car Motorbike

Umbra 60 150

BMX 80 160