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(From Chapter 2, Chapter 20.1 and lecture) Coal Steel Germany 72 18 United ...

Oct 30, 2023

(From Chapter 2, Chapter 20.1 and lecture) Coal Steel Germany 72 18 United States 108 36 Explain your answers in detail. Also give numbers and calculations if needed. a. Which country has an absolute advantage in the production of coal? b. Which country has an absolute advantage in the production of steel?

answer: a. Germany has an absolute advantage in the production of coal. answer: b. United States has an absolute advantage in the production of steel.

Key Concept

Absolute advantage refers to the ability of a country to produce a good or service more efficiently than another country.

Explanation

In this case, we can determine the country with absolute advantage by comparing the production levels of coal and steel. Germany produces 72 units of coal compared to the United States' 108 units, indicating that the United States has a higher production level. Similarly, Germany produces 18 units of steel compared to the United States' 36 units, indicating that the United States has a higher production level. Therefore, Germany has an absolute advantage in the production of coal, while the United States has an absolute advantage in the production of steel.

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