A-LevelEconomicsInternational economic issues9708/12 · May/June 2017 · Q261 Mark

The table shows the ability of two countries, P and Q, to produce two goods, Y and Z. [Figure 26.1] Which statement is correct?

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AP has an absolute advantage in Y and Q has an absolute advantage in Z.

BP has an absolute advantage in Z and Q has a comparative advantage in Y.

CP has a comparative advantage in Y and Q has a comparative advantage in Z.

DP has a comparative advantage in Z and Q has an absolute advantage in Y.

✓ Correct answer

B: P has an absolute advantage in Z and Q has a comparative advantage in Y.

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Topic: International economic issues, A-Level Economics (syllabus 9708). Multiple choice, 1 mark.
Source: A-Level Economics, May/June 2017 Paper 1 Variant 2, question 26.

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