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WAEC Economics 1992 Question 35

Question 35

International Trade

Country | Amount of Labour days | Quantity of Cocoa produced | Quantity of Textile produced
I | 200 | 600 | 900
II | 200 | 300 | 800
From the above table, we can correctly say that country

  1. A.I has absolute disadvantage in the production of both cocoa and textile
  2. B.I has absolute advantage in the production of both cocoa and textile
  3. C.II has absolute advantage in the production of both cocoa and textile
  4. D.II has comparative advantage in the production of cocoa only
  5. E.II has absolute disadvantage in the production of textile only.
Show the answer and explanation

Answer: B (I has absolute advantage in the production of both cocoa and textile)

Explanation

With the same 200 labour days, country I makes more cocoa (600 > 300) and more textiles (900 > 800), so it has an absolute advantage in both.