The domestic opportunity cost of producing 100 barrels of chemicals in Germany is one ton of steel. In France, the domestic opportunity cost of producing 100 barrels of chemicals is two tons of steel. In this case,

A) France has a comparative advantage in the production of chemicals.
B) Germany has a comparative advantage in the production of chemicals.
C) France has an absolute advantage in the production of chemicals.
D) Germany has an absolute advantage in the production of chemicals.

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16jtarver@somervilleschools.org Jtarver3 · Accepted Answer

Final Answer : B, Explanation :  Germany has a lower opportunity cost of producing chemicals, as it only needs to give up one ton of steel, while France needs to give up two tons of steel. This means that Germany has a comparative advantage in the production of chemicals, as it can produce chemicals at a lower opportunity cost than France.

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