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vladimir1956 [14]
3 years ago
10

Suppose Hank and Tony can both produce corn. If Hank's opportunity cost of producing a bushel of corn is 2 bushels of soybeans a

nd Tony's opportunity cost of producing a bushel of corn is 3 bushels of soybeans, then Hank has the comparative advantage in the production of corn.
a. True.
b. False.
Business
1 answer:
Alex787 [66]3 years ago
7 0

Answer:

The correct answer is option a.

Explanation:

Comparative advantage refers to the situation where an individual, firm, or nation can produce a good at a comparatively lower opportunity cost.  

It is given here that,

Hank's opportunity cost of producing a bushel of corn = 2 bushels of soybeans  

And,

Tony's opportunity cost of producing a bushel of corn = 3 bushels of soybeans

We see that Hank has a lower opportunity costs in the production of corn. So we can say Hank has a comparative advantage in the production of corn. Or in other words, Hank specializes in the production of corn.

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