Final answer:
The U.S. has an absolute advantage in producing plastic compared to Mexico, being able to produce more tons of plastic with the same amount of labor and capital. This concept is separate from comparative advantage, which considers relative efficiencies and forms the basis for mutually beneficial international trade. Option C is the correct answer.
Step-by-step explanation:
When comparing the production capabilities of the United States and Mexico regarding vehicles and plastic, it is necessary to determine which country has an absolute advantage in production. An absolute advantage exists when one country can produce a good more efficiently than another country. Looking at the given data, we see that with one unit of labor and one unit of capital, the U.S. can produce 40 tons of plastic, while Mexico can only produce 15 tons of plastic. Therefore, the U.S. has an absolute advantage in producing plastic because it can produce a larger quantity of plastic with the same resources.
The concept of absolute advantage is critical in international trade, as it can influence the decisions of countries when deciding which goods to specialize in and export. It differs from comparative advantage, which considers the relative efficiency of production and is the basis for trade that can benefit both parties involved. Despite the U.S. having an absolute advantage in both vehicles and plastic production as per the given data, the countries can still benefit from trade if they specialize based on their comparative advantages.
To summarize, the country with an absolute advantage in producing plastic, according to the provided data, is the U.S.
Final answer: The correct option is c) The U.S.