A Widget Has an Opportunity Cost of 4 Wadgets in Saudi

question 96

Multiple Choice

A widget has an opportunity cost of 4 wadgets in Saudi Arabia and 2 wadgets in the United States. Given these opportunity costs, you would suggest that:

• A) Saudi Arabia specialize in widgets and the United States in wadgets.
• B) No trade should take place.
• C) Saudi Arabia specialize in wadgets and the United States in widgets.
• D) Both countries should produce an equal amount of each.

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