If the opportunity cost of a table is 5 chairs in Nation A and 1 chair in Nation B,it makes sense for Nation A to produce chairs.

Question

Quizplus · Accepted Answer

The opportunity cost of producing a table is lower in Nation B than in Nation A, which indicates that Nation B has a comparative advantage in the production of tables. On the other hand, the opportunity cost of producing chairs is lower in Nation A than in Nation B, which indicates that Nation A has a comparative advantage in the production of chairs. Therefore, it makes sense for Nation A to produce chairs instead of tables.

If the Opportunity Cost of a Table Is 5 Chairs