Question

Suppose the resources of Country A would allow it to produce either 150 million...

A) Opportunity cost of producing 1 million shirts is 4 million cars

B) Opportunity cost of producing 1 million cars is 1/4 million shirts

C) Country A has a comparative advantage in producing shirts

D) Country A has a comparative advantage in producing cars

Answer 1

Comparative advantage requires comparative data, which is not provided. The opportunity cost is determined by the give-up ratio between two producible goods.

Step-by-step explanation:

The question asked pertains to the concept of opportunity cost and comparative advantage in the context of production possibilities and trade-offs within economics. Considering the information provided, we must look at the ratio of the give-up between two goods to determine these economic concepts.

For instance, if Country A can produce either 150 million shirts or 600 million cars, the opportunity cost of producing 1 million shirts is the number of cars it could have produced instead, which is 4 million cars (600/150). Conversely, the opportunity cost of producing 1 million cars is the number of shirts that could have been produced, which is 1/4 million shirts (150/600). Country A has a comparative advantage in producing the good for which it has the lowest opportunity cost when compared to another country's production.