Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. After examining the production possibilities of each country, what can we surmise about the opportunity cost of a car for Country A?
A) It is lower than that of Country B; Country A should specialize in cars and trade with Country B for trucks.
B) It is higher than that of Country B; Country A should specialize in cars and trade with Country B for trucks.
C) It is the same as that of Country B; Country A will not benefit from trade and should refrain.
D) It should have no effect on Country A's decision to trade; absolute advantage drives that decision.

Question

Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. After examining the production possibilities of each country, what can we surmise about the opportunity cost of a car for Country A?
A) It is lower than that of Country B; Country A should specialize in cars and trade with Country B for trucks. 
B) It is higher than that of Country B; Country A should specialize in cars and trade with Country B for trucks. 
C) It is the same as that of Country B; Country A will not benefit from trade and should refrain. 
D) It should have no effect on Country A's decision to trade; absolute advantage drives that decision.

Quizplus · Accepted Answer

The Answer of  Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. After examining the production possibilities of each country, what can we surmise about the opportunity cost of a car for Country A?
A) It is lower than that of Country B; Country A should specialize in cars and trade with Country B for trucks. 
B) It is higher than that of Country B; Country A should specialize in cars and trade with Country B for trucks. 
C) It is the same as that of Country B; Country A will not benefit from trade and should refrain. 
D) It should have no effect on Country A's decision to trade; absolute advantage drives that decision.

Refer to the Figure Shown, Which Represents the Production Possibilities