Question

The data table supports which conclusion?

Number of ships produced
per day
Country A: 100
Country B: 60
Number of planes produced
per day
Country A: 50
Country B: 20

A. Country A has a comparative advantage producing planes.
B. Country B has an absolute advantage producing planes.
C. Country B has an absolute advantage producing ships.
D. Country A has a comparative advantage producing ships.

Answer 1

To determine the conclusion supported by the data table, we need to analyze the concept of comparative and absolute advantage.

Comparative advantage refers to the ability of a country to produce a particular good or service at a lower opportunity cost compared to another country. Absolute advantage, on the other hand, refers to the ability of a country to produce more of a particular good or service with the same amount of resources.

Looking at the data provided:

Country A produces 100 ships per day and 50 planes per day.
Country B produces 60 ships per day and 20 planes per day.

Based on this data, we can conclude that Country A has an absolute advantage in producing both ships and planes since it produces more of each product compared to Country B. However, we cannot determine the comparative advantage based on the data provided because we don't have information about the opportunity costs or resource allocation.

Therefore, the conclusion supported by the data is that Country A has an absolute advantage in producing both ships and planes, but we cannot determine the comparative advantage.

So, the correct answer is neither A nor D.