Country a Can Product 100 Units of Good X in a Day

question 152

Multiple Choice

Country A can product 100 units of Good X in a day and 40 units of Good Y while Country B can produce 50 units of Good X and 40 units of Good Y.

• A) These countries will not trade since Country A has a comparative advantage in the production of both goods.
• B) These countries will not trade since Country A will always be able to take advantage of Country B.
• C) These countries should trade since Country A has a comparative advantage in the production of Good X and Country B has a comparative advantage in the production of Good Y.
• D) These countries should trade since Country B has a comparative advantage in the production of Good X and Country A has a comparative advantage in the production of Good Y.