152k views
0 votes
"" Alternate Outputs from One Day's Labor Input: USA: 12 bushels of wheat or 3 yards of textiles. India: 3 bushels of wheat or 12 yards of textiles. From the data, the USA:

1 Answer

4 votes

Answer:

Has a competitive advantage in the production of wheat

Step-by-step explanation:

The data of the outputs shows that the USA has the ability to produce 12 bushels of wheat or 3 yards of textil and the India has the ability to produce 3 bushels of wheat or 12 yards of textiles. Given this information we could say that the USA has a competitive advantage in the production of wheat and India has a competitive advantage in the production of textiles.

If the two countries start a commercial exchange they will benefit if they dedicate their production to the good in which they have the competitive advantage and exchange it for the good in which they are not so productive, that is:

USA trading (wheat) for India's textiles.

In that way they both can consume a greater amount of those two gods unlike if they produced and consumed without trading.

User Xeoth
by
6.1k points