Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. After comparing each country's production possibilities frontier, it is clear that:
A) Country A should specialize in cars, Country B should specialize in trucks, and both could benefit from trade.
B) Country A should specialize in trucks, Country B should specialize in cars, and both will benefit from trade.
C) Country A will not benefit from trade.
D) Country B will lose by trading with Country A.

Question

Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. After comparing each country's production possibilities frontier, it is clear that:
A) Country A should specialize in cars, Country B should specialize in trucks, and both could benefit from trade. 
B) Country A should specialize in trucks, Country B should specialize in cars, and both will benefit from trade. 
C) Country A will not benefit from trade. 
D) Country B will lose by trading with Country A.

Quizplus · Accepted Answer

The Answer of  Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. After comparing each country's production possibilities frontier, it is clear that:
A) Country A should specialize in cars, Country B should specialize in trucks, and both could benefit from trade. 
B) Country A should specialize in trucks, Country B should specialize in cars, and both will benefit from trade. 
C) Country A will not benefit from trade. 
D) Country B will lose by trading with Country A.

Refer to the Figure Shown, Which Represents the Production Possibilities