Suppose Country A can produce 100 coffees per day and Country B can produce 80 coffees per day. Who has the absolute advantage in selling coffees?

• A. Neither country has an absolute advantage
• B. Country B
• C. Both countries have the same absolute advantage
• D. Country A

Answer: (D)

Verified step by step guidance

1. Understand the concept of absolute advantage: A country has an absolute advantage in producing a good if it can produce more of that good with the same resources compared to another country.
2. Identify the production quantities given: Country A produces 100 coffees per day, and Country B produces 80 coffees per day.
3. Compare the production quantities directly since absolute advantage is about who produces more: 100 (Country A) versus 80 (Country B).
4. Determine which country produces more coffee per day: Since 100 > 80, Country A produces more coffee than Country B.
5. Conclude that Country A has the absolute advantage in producing (and thus selling) coffees because it can produce more coffee per day than Country B.