Multiple Choice
Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. Which of the following statements is true regarding Country A's opportunity cost of a t-shirt?
A) It is lower than that of Country B, so Country A should specialize in t-shirts and trade for avocados.
B) It is higher than that of Country B, so Country A should specialize in avocados and trade for t-shirts.
C) It is higher than that of Country B for both goods, so Country A will not benefit from trade.
D) It is lower than that of Country B for both goods, so Country A will not benefit from trade.
Correct Answer:
Verified
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