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(Figure: Ships and Autos in Countries a and B) Two

Question 95

Multiple Choice

(Figure: Ships and Autos in Countries A and B) Two countries manufacture autos and ships. Based on the graphs, which statement is correct? (Figure: Ships and Autos in Countries A and B)  Two countries manufacture autos and ships. Based on the graphs, which statement is correct?   A)  Country A has a comparative disadvantage in producing ships. B)  The two countries should not trade with each other because both can produce both goods. C)  Country B has an absolute advantage in both goods because the line is closer to the origin. D)  Country A has an absolute advantage in producing ships.


A) Country A has a comparative disadvantage in producing ships.
B) The two countries should not trade with each other because both can produce both goods.
C) Country B has an absolute advantage in both goods because the line is closer to the origin.
D) Country A has an absolute advantage in producing ships.

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