Question

In France, it takes one worker to produce one sweater, and one worker to produce one bottle of wine. In Tunisia, it takes two workers to produce one sweater, and three workers to produce one bottle of wine. Who has the absolute advantage in production of sweaters? Who has the absolute advantage in the production of wine? How can you tell?

a) France in sweaters, Tunisia in wine; By comparing production times.
b) Tunisia in sweaters, France in wine; By comparing production times.
c) France in sweaters, Tunisia in wine; By comparing input requirements.
d) Tunisia in sweaters, France in wine; By comparing input requirements.

Answer 1

France holds the absolute advantage in producing both sweaters and wine because it requires fewer workers to produce a single unit of each good compared to Tunisia.

Step-by-step explanation:

In the scenario provided, France has the absolute advantage in the production of both sweaters and wine. You can tell by comparing the number of workers needed to produce one unit of a good in each country. It takes only one worker in France to produce one sweater, whereas it takes two workers in Tunisia to produce the same item.

Similarly, one worker in France can produce one bottle of wine, but it requires three workers in Tunisia to produce an equivalent amount. Since France requires fewer workers for both products, it has the absolute advantage in producing both sweaters and wine.