The data in the table below assumes that with the same quantity of resources, bo

Question

The data in the table below assumes that with the same quantity of resources, both Australia and Philippines produces food and computers. Australia can make 1,000 computers or 2,000 units of food in a day, and the Philippines can make 200 computers or 1,200 units of food in a day.
Table 20.2

25. According to Table 20.2, Australia has an:

a. absolute advantage in the production of only food.
b. absolute advantage in the production of both food and computers.
c. absolute disadvantage in the production of both food and computers.

d. absolute advantage in the production of only computers.
e. absolute disadvantage in the production of food.

26. According to Table 20.2 (from question #25), what is the opportunity cost of 1 computer in Australia?

a. Half a unit of food
b. One-sixth of a unit of food c. 1 unit of food
d. 6 units of food
e. 2 units of food

Explanation / Answer

25. According to Table 20.2, Australia has an absolute advantage in the production of both food and computers.

26. The opportunity cost of 1 computer in Australia 2 units of food.

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