Question
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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