Given the Following Ricardo-Type Table Showing the Amount of Labor

question 26

Multiple Choice

Given the following Ricardo-type table showing the amount of labor input needed to get one unit of output in each industry in each country:
$$\begin{array} { l c l } &\underline{ \text { Wheat }} &\underline{ \text { Chairs} } \\\text { Malaysia } & 3 \text { days } & 2 \text { days } \\\text { India } & \text { 10 days } & 8 \text { days }\end{array}$$

• A) Terms of trade of 1 wheat:1.25 chairs is not a feasible equilibrium terms of trade.
• B) Terms of trade of 1 wheat:1.5 chairs would give all the gains from trade to India.
• C) Malaysia has an absolute advantage in both goods and a comparative advantage in Wheat.
• D) India has an absolute advantage in both goods and a comparative advantage in wheat.