To determine which country has a comparative advantage for producing cups, we need to calculate the opportunity cost of producing cups for each country. The opportunity cost of producing one unit of cups is the amount of plates that could have been produced instead. We will compare the opportunity costs for all four countries: India, France, Japan, and Canada. The country with the lowest opportunity cost for producing cups has the comparative advantage.
Here’s the breakdown step-by-step:
1. Calculate the opportunity cost of producing cups for each country:
- India:
- Cups produced per hour: 15
- Plates produced per hour: 10
- Opportunity cost of producing one cup = Plates produced per hour / Cups produced per hour = [tex]\( \frac{10}{15} = 0.6667 \)[/tex] plates per cup
- France:
- Cups produced per hour: 8
- Plates produced per hour: 9
- Opportunity cost of producing one cup = Plates produced per hour / Cups produced per hour = [tex]\( \frac{9}{8} = 1.125 \)[/tex] plates per cup
- Japan:
- Cups produced per hour: 7
- Plates produced per hour: 7
- Opportunity cost of producing one cup = Plates produced per hour / Cups produced per hour = [tex]\( \frac{7}{7} = 1 \)[/tex] plate per cup
- Canada:
- Cups produced per hour: 6
- Plates produced per hour: 9
- Opportunity cost of producing one cup = Plates produced per hour / Cups produced per hour = [tex]\( \frac{9}{6} = 1.5 \)[/tex] plates per cup
2. Compare the opportunity costs:
- India: 0.6667 plates per cup
- France: 1.125 plates per cup
- Japan: 1 plate per cup
- Canada: 1.5 plates per cup
3. Determine the comparative advantage:
- The country with the lowest opportunity cost for producing cups has the comparative advantage. Here, India has the lowest opportunity cost at 0.6667 plates per cup.
Therefore, the country with the comparative advantage for producing cups is:
C. India
