AP® Macroeconomics

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Moderate

Absolute Advantage: Corn and Wheat

APMACR-LG3FNG

In one year, Iowa can produce 5 million tons of corn, 3 million tons of wheat, or some combination of the two. In one year, Nebraska can produce 4 million tons of corn, 6 million tons of wheat, or some combination of the two.

Which of the following statements are true?

I. Nebraska has the absolute advantage in corn production.
II. Iowa has the absolute advantage in corn production.
III. Nebraska has the absolute advantage in wheat production.
IV. Iowa has the absolute advantage in wheat production.

A

II only

B

II and III only

C

II and IV only

D

I and III only

E

I, II, and IV only