-Refer to Table 3-6. If Denmark and Italy trade based on the principle of comparative advantage, which country will export or import each product?
A) Denmark will import bread, and Italy will import cheese.
B) Denmark will import bread, and Italy will import bread.
C) Denmark will import cheese, and Italy will import bread.
D) Denmark will import cheese, and Italy will import cheese.

Question

-Refer to Table 3-6. If Denmark and Italy trade based on the principle of comparative advantage, which country will export or import each product?
A) Denmark will import bread, and Italy will import cheese. 
B) Denmark will import bread, and Italy will import bread. 
C) Denmark will import cheese, and Italy will import bread. 
D) Denmark will import cheese, and Italy will import cheese.

Quizplus · Accepted Answer

Denmark will specialize in the production of the good for which it has a lower opportunity cost (cheese) and will import bread, while Italy will specialize in bread (for which it has a lower opportunity cost) and import cheese.