Question

France can produce 7 airplanes or 12 bottles of wine (and every linear combination in between)...

France can produce 7 airplanes or 12 bottles of wine (and every linear combination in between) per person. Similarly, the USA can produce 8 airplanes or 16 bottles of wine per person. Who has absolute advantage in each good? Who has comparative advantage in each good (if anyone)? Write your answer on paper and upload a picture

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Answer #1

Ans:

Absolute Advantage: USA for both goods

Comparative Advantage: Airplane- France & wine- USA

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