AP Macroeconomics : How to find productivity

Study concepts, example questions & explanations for AP Macroeconomics

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Example Questions

Example Question #1 : How To Find Productivity

Country A can produce 10 cars or 5 computers. Country B can produce 6 cars or 4 computers. 

Which country has the absolute advantage in producing computers?

Possible Answers:

Impossible to determine with the information given. 

Country A

Neither country has the absolute advantage in producing computers. 

Country B

Correct answer:

Country A

Explanation:

Absolute advantage is determined by which country can produce more, regardless of efficiency. Country A can produce more computers than Country B, so it has the absolute advantage in producing computers. 

Example Question #2 : How To Find Productivity

Country A can produce 10 cars or 5 computers. Country B can produce 6 cars or 4 computers. 

Which country has the comparative advantage in producing computers?

Possible Answers:

Country B

Impossible to determine

Country A

Neither country has the comparative advantage in producing computers. 

Correct answer:

Country B

Explanation:

Country B can produce 4 computers or 6 cars. , so Country B must give up 1.5 cars to make a computer. Country A can make 5 computers or 10 cars. , so Country A must give up producing 2 cars to make 1 computer. 

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