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In Portugal, the Opportunity Cost of a Bale of Wool

Question 137

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In Portugal, the opportunity cost of a bale of wool is 3 bottles of wine. In England, the opportunity cost of 1 bottle of wine is 3 bales of wool. Based on this information,


A) England has an absolute advantage in producing wine.
B) England has an absolute advantage in producing wool.
C) no trade will occur.
D) Portugal has a comparative advantage in producing wool.
E) Portugal has a comparative advantage in producing wine.

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