In a two-country, two-product world, the statement "Germany enjoys a comparative advantage over France in autos relative to ships" is equivalent to:

A. France having a comparative disadvantage compared to Germany in autos and ships.
B. Germany having a comparative advantage over France in autos and ships.
C. France having no comparative advantage over Germany.
D. France should produce autos. France having a comparative advantage over Germany in ships.

France having a comparative advantage over Germany in ships

Explanation:

Comparative advantage simply means someone or an organization having an advantage over another in the production of a particular good or service because he can produce the goods or service at a lower cost than another person producing the same goods or service.

Germany enjoying a comparative advantage over France in the production of autos relative to the production of ships simply means that France will have a comparative advantage over Germany in the production of ships. it would be a good business decision for Germany to go into the production of Autos and France going into the production of ships.

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