Multiple Choice
Suppose the United states production possibility frontier was flatter to the widget axis,whereas Germany's was flatter to the butter axis.We now learn that the German wage doubles,but U.S.wages do not change at all.We now know that
A) the United States has no comparative advantage.
B) Germany has a comparative advantage in butter.
C) the United States has a comparative advantage in butter.
D) Not enough information is given.
E) Germany gains a comparative advantage in widgets.
Correct Answer:
Verified
Correct Answer:
Verified
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