Consider the Following Information About the Production of Two Goods,X

question 95

Multiple Choice

Consider the following information about the production of two goods,X and Y,in two countries,A and B:
∙ In Country A it takes X_a units of resources to produce one unit of X and Y_a units of resources to produce one unit of Y.
∙ In Country B it takes X_b units of resources to produce one unit of X and Y_b units of resources to produce one unit of Y.
∙ Assume the amount of resources used to produce the goods in the two countries can be compared unambiguously.
-Refer to Table 32-1.Country A has a comparative advantage in producing good X if

• A)(X_a/Y_a)is less than (X_b/Y_b).
• B)(X_a/X_b)is greater than (Y_a/Y_b).
• C)(X_a/Y_a)is greater than (X_b/Y_b).
• D)X_a is less than Y_b.
• E)X_a = X_b.

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