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Country a and Country B Both Produce Only Two Goods

Question 36

Multiple Choice

Country A and country B both produce only two goods, cars and computers. If country A has a lower opportunity cost of producing cars, then


A) country B has an absolute advantage in computer production.
B) country B has a comparative advantage in computer production.
C) country A will have a comparative advantage in both goods if country A also has a lower opportunity cost of producing computers.
D) country A has an absolute advantage in car production.
E) country A can also have a lower opportunity cost of producing computers.

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