Refer to Table 16.1. Use the following statements to answer this question. I. Mexico has an absolute advantage in the production of tomatoes and beer.
II) Mexico has a comparative advantage in the production of tomatoes.

A) Both I and II are true.
B) I is true, and II is false.
C) I is false, and II is true.
D) Both I and II are false.

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shasha ruslan · Accepted Answer

Final Answer : A, Explanation :  Without access to Table 16.1, we can infer that statement I implies Mexico can produce more tomatoes and beer than another country or countries with the same resources, indicating an absolute advantage. Statement II suggests that Mexico can produce tomatoes at a lower opportunity cost than other goods, indicating a comparative advantage. Both statements can be true if Mexico is the most efficient producer of both goods but has a lower opportunity cost in producing tomatoes compared to beer or other goods.

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