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(Table) Germany has a comparative advantage in producing

Sweaters
Germany 6
Greece
4
Skirts
12
20
sweaters and skirts.
skirts only.
sweaters only.
neither good.

User Mgrim
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1 Answer

6 votes

Answer:

sweaters only.

Step-by-step explanation:

Comparative advantage is the ability of a firm or country to produce products using fewer resources than others. An institution or nation with a comparative advantage in producing certain goods or services will sell them at a lower price compared to others.

Given the same quantity of inputs, a country or company with a comparative advantage will produce more output units than the rivals. Germany has a comparative advantage over Greece in making sweaters. With the same inputs, Germany will produce six sweaters while Greece will produce four. However, Greece has a comparative advantage over Germany in making skirts.

User Cinder
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