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    Absolute and Comparative Advantage Analysis

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    1. Referring to Table 1, what can be concluded about Spain's absolute and comparative advantage for both boats and trucks?

    Maximum Output

    Table 1:

    Boats (Spain 3) (Portugal 2)
    Trucks (Spain 12) ( Portugal 6)

    2. Referring to Table 2:
     Who has absolute advantage in what good?
     Italy has comparative advantage in what good?
     Greece has comparative advantage in what good?

    Table 2:
    Maximum Output

    Wine (Italy 1000) (Greece 200)

    Tables (Italy 200) (Greece 100)

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    Solution Preview

    Output comparison
    1. Referring to Table 1, what can be concluded about Spain's absolute and comparative advantage for both boats and trucks?
    Maximum Output
    Table 1:
    Boats (Spain 3) (Portugal 2)
    Trucks (Spain 12) ( Portugal 6)
    2. Referring to Table 2:
    • Who has absolute advantage in what good?
    • Italy has comparative advantage in what good?
    • Greece has comparative advantage in what good?
    Table 2:
    Maximum Output
    Wine (Italy 1000) (Greece 200)
    Tables (Italy 200) (Greece 100)

    Maximum Output
    Table 1:
    Boats (Spain 3) (Portugal 2)
    Trucks (Spain 12) ( Portugal 6)

    Table 1 Problem:
    An absolute advantage is a comparison between the productivity of different economies or producers. Producer that utilizes a smaller quantity inputs to produce a good has an absolute advantage at producing that good.
    In our example, Spain produces 3 units of boats and 12 units of trucks as compared to Portugal producing ...

    Solution Summary

    An analysis of absolute advantage and comparative advantage. The production of 2 countries are examined.

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