Question

In France it takes one worker to produce one sweater, and one worker to produce one bottle of wine. In Tunisia it takes two workers to produce one sweater, and three workers to produce one bottle of wine. Who has the absolute advantage in production of sweaters? Who has the absolute advantage in the production of wine? How can you tell?

Short answer

France has absolute advantage in producing both sweater and wine.

Step-by-step solution

Absolute Advantage Definition

Absolute Advantage means that : a country can produce more output of a good - per unit input, compared to other country.

Production Possibilities Concept  

Labour hours needed to produce per unit sweater & wine in France & Tunisia.

	Labour : Sweater	Labour : Wine
France	1	1
Tunisia	2	3

Solution Explanation

France has absolute advantage in producing sweaters, as it can produce a unit sweater with lesser labour hours (1 hour) than Tunisia (2 hours) .

France has absolute advantage in producing in producing wine, as it can produce a unit wine with lesser labour hours (1 hour) than Tunisia (3 hours).