Question

If Argentina is capable of producing up to 200 airplanes or 500 shirts in a year, and Brazil could produce 1000 airplanes or 800 shirts in a year, who has the absolute advantage in producing shirts?

Answer 1

Argentina has the absolute advantage in producing shirts.

Explanation:

Absolute advantage of a country is defined by the efficiency of the country to produce the particular product.

In the given question absolute advantage of Brazil is producing airplanes (1000 airplanes) then producing shirts (800 shirts).

While Argentina's absolute advantage is in producing shirts (500 shirts) than airplanes (200 airplanes)

Therefore, Argentina has the absolute advantage over Brazil in producing shirts.