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AP® Macroeconomics

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Absolute Advantage: Reindeer and Herring

APMACR-ODSOK4

In a year, Finland can produce 8,000 tons of herring or 6000 reindeer or some combination of the two. Norway can produce 7000 tons of herring or 7000 reindeer in a year or some combination of the​ two.

Which of these statements about Finland and Norway are true?

A

Finland has the absolute advantage in reindeer only.

B

Norway has the absolute advantage in both goods.

C

Finland has the absolute advantage in herring only.

D

Norway has the absolute advantage in herring only.

E

Norway does not have the absolute advantage in either good.