Multiple Choice
Suppose there are only 2 nations A and B, and only two goods, x and y. If nation A produces only x, it can make 12x per day. If nation A produces only y, it can make 36y per day. If nation B produces only x, it can make 4x per day. If nation B produces only y, it can make 12y per day. After trade begins, nation _______ will specialize in the production of x and nation _______ will specialize in the production of y.
A) B; B
B) B; A
C) A; B
D) No trade will occur.
Correct Answer:
Verified
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