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Given the Following Ricardo-Type Table Shows the Labor Input Required

Question 11

Multiple Choice

Given the following Ricardo-type table shows the labor input required per unit of output in each of the two industries in each of the two countries:
 SteelCloth  United Kingdom  4 days 8 days  Germany  6 days 9 days \begin{array} { l l l } & \underline{ { \text { SteelCloth }} } \\& & \\\text { United Kingdom } & \text { 4 days } & 8 \text { days } \\\text { Germany } & \text { 6 days } & 9 \text { days }\end{array}
Which one of the following statements is true?


A) The United Kingdom has an absolute advantage in both goods and a comparative Advantage in cloth.
B) The pretrade price ratio in the United Kingdom is 1 steel:2 cloth.
C) The United Kingdom has an absolute advantage in neither good but a comparative Advantage in steel.
D) The pretrade price ratio in Germany is 1 cloth:1.5 steel.

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