Question

Say that Alland can produce 32 units of food per person per year or 16 units of clothing per person per year, but Georgeland can produce 36 units of food per year or 18 units of clothing. Which of the following is true?
1.Georgeland has an absolute but not a comparative advantage in producing clothing.
2.Georgeland has both an absolute and a comparative advantage in producing clothing.
3.Alland has an absolute but not a comparative advantage in producing food.
4.Alland has both an absolute and a comparative advantage in producing food.

Answer 1

Answer:

1.Georgeland has an absolute but not a comparative advantage in producing clothing.

Explanation:

Georgeland has an absolute advantange, because with the factors of production that it has available (the question does not specify the amount), it can produce either more food, or more clothing than Alland.

But Georgeland does not have comparative advantage in producing clothing, because the cost of opportunity of doing so is higher than Alland's, as can be seen in this comparison:

If Alland produces 16 units of clothing, it gives up on 32 units of food.

If Georgeland produces 18 units of clothing, it gives up on 36 units of food.