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Master the concepts of absolute and comparative advantage to understand how countries benefit from specialization and trade.
When determining absolute advantage using a table that shows the number of labor hours required to produce a good, what specific value indicates that a producer has the advantage?
This table shows the number of labor hours needed to make one unit of wheat or cloth in two countries, the USA and France.
Apply what you've learned with these practice questions. These questions test your understanding of the key concepts.
Country A can produce 10 cars or 20 computers. Country B can produce 8 cars or 12 computers. Which country has the comparative advantage in producing cars?
