1. As we said, we're starting out easy. Remember that a comparative advantage exists when a country enjoys a lower opportunity cost of production than another, while an absolute advantage means a country can simply produce more than another.

  If we examine the table to the right we see that Country 1 has an absolute advantage in burrito production since it can produce up to 150 when it uses all its resources, while Country 2 can only produce 100. Country 2 has an absolute advantage in computer manufacture since it can produce 100 using all its resources, compared to the 50 that Country 1 can produce.

  In Country 1 the opportunity cost of a burrito is only 1/3 a computer while in Country 2 the opportunity cost of a burrito is 1 computer. Thus, Country 1's comparative advantage lies in burrito production. In Country 2 the opportunity cost of a computer is 1 burrito, while in Country 1 the opportunity cost of a computer is 3 burritos so Country 2's comparative advantage is in burrito production. (Remember that a country can have an absolute advantage, while not having a comparative advantage. In this case, however, each country's comparative advantage is the same as its absolute advantage.)

   So, only choice e. "Country 2 has a comparative and absolute advantage in the production of computers." is correct.