Statements regarding absolute advantage

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Suppose that the United States and Italy are considering trade in two products: grain and oranges. Suppose that before trade, the United States produces 800 million bushels of grain and 200 million bushels of oranges. At the same time, Italy produces 200 million bushels of grain and 100 million bushels of oranges. Which of the following statements regarding absolute advantage is true? A.The United States has an absolute advantage in producing both grain and oranges. B.Italy has an absolute advantage in producing both grain and oranges. C.The United States has an absolute advantage in producing grain only. D.Italy has an absolute advantage in producing oranges only.

Reference no: EM131392187

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