Question

The United States and France both produce sweaters and caps. Suppose that a US worker can produce 50 caps per hour or 1 sweater per hour and a French worker can produce 40 caps per hour and 2 sweaters per hour. Based on this scenario, which statement is true?
The United States has a comparative advantage producing caps.
France has a comparative advantage producing caps.
The United States has a comparative advantage producing sweaters.
Neither country has a comparative advantage producing either good.

Answer 1

The first statement is true, because the US worker can produce 10 more caps in the same amount of time as the French worker, the US has a comparative advantage when making caps.

Answer 2

Explanation :

It is considered that a US worker can produce 50 caps per hour or 1 sweater per hour and a French worker can produce 40 caps per hour and 2 sweaters per hour.

In one hour, A US worker can produce either 50 caps or 1 sweater.

While in one hour a French worker can produce 40 caps and 2 sweaters.

In this case, the efficiency and production rate is not given. So, we can't compare this scenario.

Hence, the correct option is (c) " Neither country has a comparative advantage producing either good ".