SCENARIO: ABSOLUTE AND COMPARATIVE ADVANTAGE

Multiple Choice

SCENARIO: ABSOLUTE AND COMPARATIVE ADVANTAGE
Poland requires 4 hours of labor to produce a ton of coal and 10 hours of
Labor to produce 10 bushels of wheat.The Czech Republic requires 6
Hours of labor to produce a ton of coal and 10 hours of labor to produce
10 bushels of wheat.
Reference: Ref 2­5
(Scenario: Absolute and Comparative Advantage) Suppose that the
International price of coal is 4 1/4 bushels of wheat per ton of coal.
Which country is likely to have the larger gain from trade?

A) Poland
B) the Czech Republic
C) Neither country has the larger gain.
D) Both countries have the larger gain.