Multiple Choice
Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. After examining the production possibilities of each country, what can we surmise about the opportunity cost of a car for Country A?
A) It is lower than that of Country B; Country A should specialize in cars and trade with Country B for trucks.
B) It is higher than that of Country B; Country A should specialize in cars and trade with Country B for trucks.
C) It is the same as that of Country B; Country A will not benefit from trade and should refrain.
D) It should have no effect on Country A's decision to trade; absolute advantage drives that decision.
Correct Answer:

Verified
Correct Answer:
Verified
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