Multiple Choice
Country A can product 100 units of Good X in a day and 40 units of Good Y while Country B can produce 50 units of Good X and 40 units of Good Y.
A) These countries will not trade since Country A has a comparative advantage in the production of both goods.
B) These countries will not trade since Country A will always be able to take advantage of Country B.
C) These countries should trade since Country A has a comparative advantage in the production of Good X and Country B has a comparative advantage in the production of Good Y.
D) These countries should trade since Country B has a comparative advantage in the production of Good X and Country A has a comparative advantage in the production of Good Y.
Correct Answer:
Verified
Correct Answer:
Verified
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