This Table Shows How Much Wine and Cheese Can Be

question 107

Multiple Choice

This table shows how much wine and cheese can be produced in Spain and Portugal with one unit of equivalent resources. Initially there is no trade. Once trade opens up, transportation costs are assumed to be zero. $$\begin{array}{l}\begin{array} { | l | l | l | } \hline & \begin{array} { l } \text { Wine } \\\text { (units) }\end{array} & \begin{array} { l } \text { Cheese } \\\text { (units) }\end{array} \\\hline \text { Spain } & 2 & 8 \\\hline \text { Portugal } & 2 & 3 \\\hline\end{array}\\\text { TABLE 33- } 5\end{array}$$
-Refer to Table 33- 5. The comparative advantage in wine is held by

• A) Portugal.
• B) both countries.
• C) -- insufficient information to determine the answer.
• D) neither country.
• E) Spain.

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