France can produce 7 airplanes or 12 bottles of wine (and every linear combination in between)...

France can produce 7 airplanes or 12 bottles of wine (and every linear combination in between) per person. Similarly, the USA can produce 8 airplanes or 16 bottles of wine per person. Who has absolute advantage in each good? Who has comparative advantage in each good (if anyone)? Write your answer on paper and upload a picture

Expert Solution

Absolute advantage - The USA has an absolute advantage in the production of both the goods.

France has a comparative advantage in the production of airplanes and the USA has a comparative advantage in the production of wine.

Rahul Sunny answered 2 years ago

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