Suppose France Can Produce Four Phones or Three Computers with One

question 47

Multiple Choice

Suppose France can produce four phones or three computers with one unit of labor, and Sweden can produce one phone or two computers with one unit of labor. If France can trade only with Sweden, then the theory of comparative advantage suggests that:

• A) France should specialize in producing phones and import computers from Sweden.
• B) France should specialize in producing computers and import phones from Sweden.
• C) France should produce both phones and computers, and import nothing from Sweden.
• D) France should import both phones and computers from Sweden.

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Definitions:

Customer

An individual or business that purchases goods or services from a company.

Retailer

A business or individual that sells goods or services directly to consumers, acting as the final link in the supply chain.

In-Transit Merge

Logistics strategy where goods from different suppliers are combined into a single shipment en route to the customer to reduce handling costs and improve efficiency.

Drop-Shipping

A retail fulfillment method where a store doesn't keep the products it sells in stock but instead transfers the customer orders and shipment details to either the manufacturer or a wholesaler, who then ships the goods directly to the customer.