Asked by Nitin Bhogaraju on Jun 28, 2024
Verified
(Figure: Comparative Advantage) Use Figure: Comparative Advantage.Eastland has a comparative advantage in producing:
A) oranges only.
B) peaches only.
C) both oranges and peaches.
D) neither oranges nor peaches.
Comparative Advantage
The skill of an individual, enterprise, or nation in producing a commodity or performing a service with a lower sacrifice of alternative opportunities than competing entities.
Oranges
A citrus fruit that is often considered in economic examples related to trade, comparative advantage, and consumer choice.
Peaches
A type of fruit with a characteristic fuzzy skin and sweet flesh, commonly eaten fresh or used in cooking and baking.
- Comprehend the principle of comparative advantage and its role in influencing the specialization of production among nations or individuals.
- Identify which entities possess a relative or complete advantage by evaluating opportunity costs.
Verified Answer
JM
Jazzy MooreJun 30, 2024
Final Answer :
A
Explanation :
Eastland has a comparative advantage in producing the good for which it has the lower opportunity cost. The figure (not visible here) would typically show that Eastland can produce oranges at a lower opportunity cost compared to peaches, hence it has a comparative advantage in oranges. Comparative advantage is determined by opportunity cost, not by the absolute amount of goods produced.
Learning Objectives
- Comprehend the principle of comparative advantage and its role in influencing the specialization of production among nations or individuals.
- Identify which entities possess a relative or complete advantage by evaluating opportunity costs.