Absolute and Comparative Advantages in Production

Steps:

• Identify absolute advantage by comparing total output: country with higher production of a good using all resources has absolute advantage.
• Calculate opportunity cost for each good: units of one good forgone to produce one unit of the other.
• Determine comparative advantage: country with lower opportunity cost for a good has comparative advantage in it.
• Match findings to choices based on table data for goods X and Y.

Why A is correct:

• Country R produces more Y than T with all resources (absolute advantage definition), and R's opportunity cost of X (Y forgone per X) is lower than T's (comparative advantage via opportunity cost).

Why the others are wrong:

• B: R has absolute advantage in X, not Y, per table outputs.
• C: T lacks absolute advantage in X; R produces more X.
• D: T has no absolute advantage in Y; R produces more Y.

Final answer: A