If country X can produce 100 units of a good with given resources, while country Y can produce 60 units, X has the ...

• A. Comparative advantage
• B. Neither
• C. Specialization
• D. Absolute advantage

Answer: (D)

This is about absolute advantage: when one country can produce more of a good with the same resources than another. Here, using the same resources, country X can produce 100 units while country Y can produce 60 units. That higher output shows X has the absolute advantage in producing that good.

Keep in mind that comparative advantage depends on relative productivity and opportunity costs across goods, not just total output. So you can’t infer comparative advantage from these numbers alone. Specialization and trade stem from comparative advantages, and even if X has the absolute advantage in this good, Y might have a comparative advantage in another good, leading to mutual gains from trade.