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If All We Know Is That the Opportunity Cost of a Car

Question 35

Multiple Choice

If all we know is that the opportunity cost of a car equals 100 refrigerators in France,and 200 refrigerators in Italy,we can conclude


A) nothing about which nation has the absolute advantage in refrigerator production
B) that France has a comparative advantage in refrigerator production
C) that mutually beneficial international trade might involve the market exchange of 1 car for 80 refrigerators (whereby France would gain more than Italy)
D) that mutually beneficial international trade might involve the market exchange of 1 car for 300 refrigerators (whereby Italy would gain more than France)
E) that France has the absolute advantage in car production

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