An American worker can make 20 pairs of shoes per day or grow 100 apples per day. On the other hand, a Brazilian worker can produce 10 pairs of shoes or grow 20 apples per day. Based on this, the United States has a(n) _____ in the production of apples and should produce apples and trade for shoes.

Question

(1 point)
Responses

comparative disadvantage
comparative disadvantage

absolute advantage
absolute advantage

scarcity
scarcity

equilibrium
equilibrium

Answer 1

Based on the information provided, the United States has a comparative disadvantage in the production of apples and should produce apples and trade for shoes.

Here's the reasoning:

1. Opportunity Cost for the US:

   • If an American worker produces 20 pairs of shoes, they forego the opportunity to grow 100 apples. Therefore, the opportunity cost of producing 1 pair of shoes is 5 apples (100 apples / 20 shoes).

2. Opportunity Cost for Brazil:

   • If a Brazilian worker produces 10 pairs of shoes, they forego the opportunity to grow 20 apples. Thus, the opportunity cost of producing 1 pair of shoes is 2 apples (20 apples / 10 shoes).

Since the U.S. gives up more apples to make shoes than Brazil does, the U.S. has a comparative disadvantage in apples. Thus, they should specialize in shoes and trade for apples.