Question

The table shows the total number of ships and planes two countries could each produce if they fully devoted their economic resources to producing one or the other. The data in the table most support which conclusion.

Answer 1

Answer:

It's B

Explanation:

Answer 2

Answer:

Country A have comparative advantage in ships.

Country B have comparative advantage in planes.

Explanation:

It can be seen in given table that Country B has absolute advantage and producing both ships and planes.

To find the comparative advantage the estimation of opportunity cost is required which can be done as shown below:

For Country A:

Opportunity cost of 1 ship = \frac{20}{60}

=\frac{1}{3}

Opportunity cost of 1 plane = \frac{60}{20}

=3

For Country B:

Opportunity cost of 1 ship = \frac{50}{100}

=\frac{1}{2}

Opportunity cost of 1 plane = \frac{100}{50}

=2

So, it can be seen that opportunity cost of producing ship in Country A is less than Country B and opportunity cost of producing plane in Country A is more than Country B.

It can be concluded that Country A have comparative advantage and producing ship whereas, Country B has in producing plane.

Therefore, Country A must trade ships and Country B must trade planes to have advantage.

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