good.
452 19 • International Trade

Country

Oil (hours per barrel) Corn (hours per bushel)

Saudi Arabia

1

United States 2

4

1

TABLE 19.1 How Many Hours It Takes to Produce Oil and Corn

In Table 19.1, Saudi Arabia has an absolute advantage in producing oil because it only takes an hour to

produce a barrel of oil compared to two hours in the United States. The United States has an absolute

advantage in producing corn.

To simplify, let’s say that Saudi Arabia and the United States each have 100 worker hours (see Table 19.2).

Figure 19.2 illustrates what each country is capable of producing on its own using a production possibility

frontier (PPF) graph. Recall from Choice in a World of Scarcity that the production possibilities frontier shows

the maximum amount that each country can produce given its limited resources, in this case workers, and its

level of technology.

Country

Saudi

Arabia

United

States

Oil Production using 100 worker hours
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