Answer to Question #35117 in Macroeconomics for Meeha

Question

Country A and country B produce the same consumption good and capital goods and currently have identical production abilities curve they also have the same resources at the Present and have access to the same technology. At present, does either country have a comparative advantage in producing capital goods? Consumption goods?

Answer 1

No country has the comparative advantage, as both of them have the equal consumption of goods and other terms. As the production of two goods is more efficient (the slope of the ppf) , every country will produce both capital and consumption goods.