Question

Duckistan Production Possibilities A B C D E Civilian Goods 20 18 14 8 0 Military Goods 0 1 2 3 4 Herbania Production Possibilities A B C D E Civilian Goods 40 36 26 14 0 Military Goods 0 1 2 3 4 Refer to the tables. Suppose that the amount and quality of resources are the same in both countries. We can conclude that Select one: A. Herbania is technologically better than Herbania at producing both military goods and civilian goods. B. Herbania is technologically superior to Duckistan in producing civilian goods. C. Duckistan is technologically better than Herbania at producing military goods. D. the total opportunity cost of producing 4 units of military goods is the same in both countries.

Answer 1

Answer:

B. Herbania is technologically superior to Duckistan in producing civilian goods.

Explanation:

Duckistan Production Possibilities

                            A    B    C    D    E

Civilian Goods    20  18   14    8    0

Military Goods     0     1    2     3    4

opportunity cost  -     ¹/₁₈  ¹/₇  ³/₈   4     civilian goods

opportunity cost  20  18   7   2.7   -     military goods

Herbania Production Possibilities

                            A    B    C    D    E

Civilian Goods    40  36  26   14   0

Military Goods     0    1     2     3    4

opportunity cost  -    ¹/₃₆  ¹/₁₃  ³/₁₄  4     civilian goods

opportunity cost  40 36   13  4.7   -     military goods

Herbania has an absolute advantage in the production of civilian goods. Since it also has a lower opportunity cost of producing civilian goods, therefore, it also has a comparative advantage at producing civilian goods. Assuming that resources are equal in both countries, then we can assume that Herbania is technologically superior in the production of civilian goods.

Dukistan has a lower opportunity cost of producing military goods, therefore, it has a comparative advantage at producing military goods.