Suppose two countries each produce wool and cotton.The country with the higher opportunity cost for cotton (in terms of wool)must also have

Question

Quizplus · Accepted Answer

The country with the higher opportunity cost for cotton (in terms of wool) means that it has to give up more units of wool to produce a unit of cotton compared to the other country. This indicates that it is less efficient in producing cotton and thus has a comparative advantage in the production of wool.

Suppose Two Countries Each Produce Wool and Cotton