Country A can produce either 20 cars and 0 wine or 0 cars and 100 wine and has a constant opportunity cost ration of 1 car: 5 wine. Country B can produce either 10 cars and 0 wine or 0 cars and 200 wine and has a constant opportunity cost ration of 1 car : 20 wine. Which country has an Absolute Advantage (AA) in cars?What is the most likely reason for a firm to supply more when the price of the good increases?
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country A has the absolute advantage
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