Using all of their resources, Company A can make either 100 computers or 50 cell phones while Company B can make either 200 computers or 150 cell phones. If both companies have the same quantity of resources, then has an absolute advantage in computers while has a comparative advantage in cell phones.

company B

company B

Explanation:

A company has comparative advantage in production if it produces at a lower opportunity cost when compared to other companies.

Opportunity cost of producing cell phones

company A = 100 / 50 = 2

company B = 200 / 150 = 1.3

The opportunity cost of company B is lower than that of company A. Company B has a comparative advantage in the production of cell phones

A company has absolute advantage in the production of a good or service if it produces more quantity of a good when compared to other countries

Company B produces 200 computers while company A produces 100 computer. Company B has an absolute advantage in the production of computers

lbc corporation makes and sells a product called product wz. each unit of product wz requires 4.1 hours of direct labor at the rate of $20.00 per direct labor-hour. management would like you to prepare a direct labor budget for june. the company plans to sell 28,000 units of product wz in june. the finished goods inventories o