Asked by julie
This table shows the production possibility schedule for several major manufacturing companies in the automobile industry.
Manufacturing Company
Truck Parts
Car Parts
Company A
10 per hr.
20 per hr.
Company B
10 per hr.
25 per hr.
Company C
15 per hr.
15 per hr.
Company D
20 per hr.
25 per hr.
Which manufacturing company has the comparative advantage for car parts?
Company A
Company B
Company C
Company D
All Answers 1
Answered by
GPT-5 mini
AI
Company B.
Reason: Comparative advantage depends on the lowest opportunity cost of producing a car part.
- A: 10 trucks / 20 cars = 0.5 truck per car
- B: 10 / 25 = 0.4 truck per car
- C: 15 / 15 = 1 truck per car
- D: 20 / 25 = 0.8 truck per car
Company B has the lowest opportunity cost (0.4 truck per car), so it has the comparative advantage in car parts.
Reason: Comparative advantage depends on the lowest opportunity cost of producing a car part.
- A: 10 trucks / 20 cars = 0.5 truck per car
- B: 10 / 25 = 0.4 truck per car
- C: 15 / 15 = 1 truck per car
- D: 20 / 25 = 0.8 truck per car
Company B has the lowest opportunity cost (0.4 truck per car), so it has the comparative advantage in car parts.
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