If All We Know Is That the Opportunity Cost of a Car

question 35

Multiple Choice

If all we know is that the opportunity cost of a car equals 100 refrigerators in France,and 200 refrigerators in Italy,we can conclude

• A)nothing about which nation has the absolute advantage in refrigerator production
• B)that France has a comparative advantage in refrigerator production
• C)that mutually beneficial international trade might involve the market exchange of 1 car for 80 refrigerators (whereby France would gain more than Italy)
• D)that mutually beneficial international trade might involve the market exchange of 1 car for 300 refrigerators (whereby Italy would gain more than France)
• E)that France has the absolute advantage in car production

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