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If Sweden Exports Cell Phones to UAE and UAE Exports

Question 3

Multiple Choice

If Sweden exports cell phones to UAE and UAE exports oil to Sweden, which of the following would explain this pattern of trade?


A) Sweden has a lower opportunity cost of producing cell phones than UAE and UAE has a comparative advantage in producing oil.
B) Sweden has a higher opportunity cost of producing cell phones than UAE, and UAE has a higher opportunity cost of producing oil.
C) Sweden must have an absolute advantage in producing cell phones and UAE must have an absolute advantage in producing oil.
D) The opportunity cost of producing oil in UAE is higher than the opportunity cost of producing oil in Sweden.

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