Question

In Bangladesh one person can produce 330 pounds of rice or 110 shirts in one year. In Singapore one person can produce 400 pounds of rice or 200 shirts in one year. Which of the following statements is true? a. ​ Bangladesh has a comparative advantage in the production of rice. b. ​ Bangladesh has an absolute advantage in the production of rice. c. ​ Singapore has both an absolute and comparative advantage in the production of rice. d. ​ Singapore has a comparative advantage in the production of rice.

Answer 1

Answer: Bangladesh has a comparative advantage in the production of rice.

Explanation: Comparative advantage is a situation whereby a person or a country can produce a good or service at a lower opportunity cost than their competitors.