Answer: B. The US has an Absolute advantage in both drill and computer production.
Explanation:
United States
Opportunity cost of producing computers = 20/10 = 2 drills
Opportunity cost of producing drills = 10/20 = 0.5 computers
Germany
Opportunity cost of producing computers = 10/2 = 5 drills
Opportunity cost of producing drills = 2/10 = 0.2 computers
The country with a Comparative advantage in producing a good is the one with the lower opportunity cost.
The country with the Absolute advantage is the one that produces more of a good than the other.
The US produces more drills and computers than German so have an Absolute advantage in both.
