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Mexico and Canada Produce Both Oil and Apples Using Labour

Question 62

Multiple Choice

Mexico and Canada produce both oil and apples using labour only. A barrel of oil is produced with 4 hours of labour in Mexico and 8 hours of labour in Canada. A bushel of apples is produced with 8 hours of labour in Mexico and 12 hours of labour in Canada. Canada has


A) an absolute advantage in oil production.
B) an absolute advantage in apple production.
C) a comparative advantage in oil production.
D) a comparative advantage in apple production.
E) a comparative advantage in oil production and a comparative advantage in apple production.

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