-Refer to Table 3-6. If Denmark and Italy trade based on the principle of comparative advantage, which country will export or import each product?
A) Denmark will export bread, and Italy will export cheese.
B) Denmark will export bread, and Italy will export bread.
C) Denmark will export cheese, and Italy will export cheese.
D) Denmark will export cheese, and Italy will export bread.

Question

-Refer to Table 3-6. If Denmark and Italy trade based on the principle of comparative advantage, which country will export or import each product?
A) Denmark will export bread, and Italy will export cheese. 
B) Denmark will export bread, and Italy will export bread. 
C) Denmark will export cheese, and Italy will export cheese. 
D) Denmark will export cheese, and Italy will export bread.

Quizplus · Accepted Answer

Denmark will export bread because it has a lower opportunity cost for producing bread compared to cheese, indicating a comparative advantage in bread production. Italy will export cheese because it has a lower opportunity cost for producing cheese compared to bread, indicating a comparative advantage in cheese production. Comparative advantage drives trade decisions, leading to this arrangement.