Question

Using the table below, show and explain how Mexico has the comparative advantage in phones.

	Mexico		United States
Possibility	Burgers	Phones	Burgers	Phones
A	6	0	12	0
B	4	8	8	8
C	2	16	4	16
D	0	24	0	24

Answer 1

Solution -

we know that ,

comparative advantage means compare advantage between to points

Now Find For Mexico,

here we put inputs

6/6 = 24/6

1 burger = 4 phones

Now Find For United States,

here we put inputs

= 12/12 = 24/121

1 burger = 2 phones