How to find productivity

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AP Macroeconomics › How to find productivity

Questions 1 - 2
1

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?

Country B

Country A

Neither country has the comparative advantage in producing computers.

Impossible to determine

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.

2

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?

Country A

Country B

Neither country has the absolute advantage in producing computers.

Impossible to determine with the information given.

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.

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