(Table: The Production Possibilities for Tractors and Crude Oil) Use Table: The Production Possibilities for Tractors and Crude Oil.The United States has a comparative advantage in _,and Mexico has a comparative advantage in _.

A) both goods;neither good
B) neither good;both goods
C) tractors;crude oil
D) crude oil;tractors

Question

(Table: The Production Possibilities for Tractors and Crude Oil) Use Table: The Production Possibilities for Tractors and Crude Oil.The United States has a comparative advantage in _____,and Mexico has a comparative advantage in _____.

A) both goods;neither good
B) neither good;both goods
C) tractors;crude oil
D) crude oil;tractors

Daniela Jiménez · Accepted Answer

Final Answer : C, Explanation :  Comparative advantage is determined by which country can produce a good at a lower opportunity cost. Without specific numbers, the general principle is that if the U.S. can produce tractors more efficiently (with less sacrifice of producing crude oil) than Mexico, it has a comparative advantage in tractors. Conversely, if Mexico can produce crude oil more efficiently (with less sacrifice of producing tractors) than the U.S., it has a comparative advantage in crude oil.

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