Question

The United States and France both produce sweaters and caps. Suppose that a US worker can produce 50 caps per hour or 1 sweater per hour and a French worker can produce 40 caps per hour and 2 sweaters per hour. Based on this scenario, which statement is true? The United States has a comparative advantage producing caps. France has a comparative advantage producing caps. The United States has a comparative advantage producing sweaters. Neither country has a comparative advantage producing either good.

Answer 1

The first statement is true, because the US worker can produce 10 more caps in the same amount of time as the French worker, the US has a comparative advantage when making caps.

Answer 2

"The United States has a comparative advantage producing caps" is the one statement among the following choices given in the question that is true. The correct option among all the options that are given in the question is the first option. I hope that this is the answer that has come to your desired help.