If Country a Can Produce an Extra Plane by Giving

question 35

Multiple Choice

If Country A can produce an extra plane by giving up two boats, and Country B can produce an extra plane by giving up three boats, then

• A) Country A would like to trade with B, but B cannot gain by trading with A.
• B) Country A has an absolute advantage in producing planes and a comparative advantage in producing boats.
• C) Country A has a comparative advantage over Country B in the production of planes.
• D) the two countries have no incentive to trade with one another.
• E) Country B has a comparative advantage over Country A in the production of planes.