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AP® Macroeconomics

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Comparative Advantage Application

APMACR-KX6EYX

The graph above shows the production possibility curves for two countries--Alpha and Beta and demonstrates the output each country can produce in a given amount of time. Which of the following is true?

A

Beta has the comparative advantage in both utils and widgets.

B

Alpha has the absolute advantage in utils.

C

Alpha has a comparative advantage in widgets.

D

the opportunity cost of producing utils is lower in Alpha than in Beta.

E

Beta is less efficient when producing both goods compared to Alpha.