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Assume That Germany and China Can Produce Beer and Cloth

Question 114

Multiple Choice

Assume that Germany and China can produce beer and cloth. If the MPLc/MPLb for Germany is 2/5 and MPLc/MPLb for China is 1, then China should:


A) specialize in producing beer and export beer.
B) specialize in producing cloth and export cloth.
C) not specialize, because China will not benefit from it.
D) specialize in producing cloth and import cloth.

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