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Potatoes and wheat output (tons per day)

Country Potatoes Wheat
United States 4 2
Ireland 3 1

The United States has a comparative advantage in producing: __________

a. wheat
b. neither
c. potatoes
d. both

Respuesta :

Answer:

c. potatoes

Explanation:

The computation is shown below:

Opportunity cost of producing 1 tons of wheat is  

for US = 4 ÷ 3 = 1.33 tons of potatoes

for Ireland = 2 ÷ 1 = 2 tons of potatoes

As the opportunity cost is higher in united states of potatoes so here the united stated should be comparative advantage in generating potatoes  

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