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There are two countries: Country A and Country B. These countries have the same amount of resources and both produce two goods, hamburgers and tofu

There are two countries: Country A and Country B. These countries have the same amount of resources and both produce two goods, hamburgers and tofu patties.

If Country A dedicates all of its resources to hamburgers, it can produce 800 hamburgers. If Country A dedicates all of its resources to tofu patties, it can produce 1000 tofu patties.

If Country B dedicates all of its resources to hamburgers, it can produce 400 hamburgers. If Country B dedicates all of its resources to tofu patties, it can produce 800 tofu patties.

Which country has an absolute advantage in each good?

  • Country A has an absolute advantage in hamburgers, Country B has an absolute advantage in tofu patties
  • Country A has an absolute advantage in tofu patties, Country B has an absolute advantage in hamburgers
  • Country B has an absolute advantage in both goods
  • Country A has an absolute advantage in both goods

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