Multiple Choice
If Country A can produce an extra plane by giving up two boats, and Country B can produce an extra plane by giving up three boats, then
A) Country A has an absolute advantage in producing planes and a comparative advantage in producing boats.
B) Country A would like to trade with B, but B cannot gain by trading with A.
C) Country A has a comparative advantage over Country B in the production of planes.
D) the two countries have no incentive to trade with one another.
E) Country B has a comparative advantage over Country A in the production of planes.
Correct Answer:
Verified
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