The Country of Rhozundia is blessed with rich copper deposits. The cost of copper produced (relative to the cost of widgets produced) is therefore very low. From this information we know that
A) Rhozundia has a comparative advantage in copper.
B) Rhozundia should import copper and export widgets.
C) Rhozundia should export both widgets and copper.
D) Rhozundia should invest in more widget production.
E) Rhozundia may or may not have a comparative advantage in copper.

Question

Quizplus · Accepted Answer

The information provided only indicates that copper is relatively cheaper to produce in Rhozundia compared to widgets, but it does not provide information about Rhozundia's production costs or efficiency relative to other countries, which is necessary to determine comparative advantage. Comparative advantage involves comparing the opportunity costs of production between countries, not just the absolute cost in one country.

The Country of Rhozundia Is Blessed with Rich Copper Deposits