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d. Korea has an absolute advantage in the production of both food and electronics 6. Which of the following statements about
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Ans: a) Australia has a comparative advantage in the production of food while Korea has a comparative advantage in the production of Electronics.

Reason: Absolute advantage means when a country has the resources for producing quality product relative to another country. Whereas, in comparative advantage, opportunity cost play the primal role. In this case, Korea has a greater opportunity cost of producing food than of electronics and vice versa for Australia. Opportunity cost is the amount foregone of one commodity by adding an additional unit of another commodity.

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