Use the table below to answer the question below;
The international production set for Nigeria and Austria is;
| Products | Nigeria | Austria |
| Cocoa | 20 tonnes | 12 tonnes |
| Lace | 1o metres | 8 metres |
From the table, it can be deduced that_______
Nigeria should produce cocoa and lace
Nigeria can benefit from producing lace only
Austria should produce lace and Nigeria should produce cocoa
Austria should produce cocoa and lace
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Discussions (4)
the answer should be A because Nigeria has an advantage in producing both commodities
it should be A because Nigerian has absolute cost advantage in the production of cocoa and lace
It cannot be A. Absolute advantage.
In absolute advantage, Austria should NOT be able to produce either Cocoa or lace, Nigeria alone should be able to produce the two commodities. That is why it is termed ABSOLUTE and not COMPARARIVE like in the table above.
