If Country a Can Produce an Extra Plane by Giving

question 277

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