If Korea is capable of producing either shoes or soccer balls or some combination of those two products,then
A)Korea should specialize in the product in which it has an absolute advantage.
B)it would be impossible for Korea to have an absolute advantage over another country in both products.
C)it would be difficult for Korea to benefit from trade with another country if Korea is efficient in the production of both goods.
D)Korea's opportunity cost of shoes is the inverse of its opportunity cost of soccer balls.

Question

Quizplus · Accepted Answer

If Korea is capable of producing either shoes or soccer balls, then it must have some comparative advantage in the production of one good over the other. Therefore, the opportunity cost of producing one good is the inverse of the opportunity cost of the other good. This means that if Korea has a low opportunity cost of producing shoes, it must have a high opportunity cost of producing soccer balls and vice versa. Therefore, the best choice is D.

If Korea Is Capable of Producing Either Shoes or Soccer