Table 3-2
Assume that Aruba and Iceland can switch between producing coolers and producing radios at a constant rate.

-Refer to Table 3-2.Aruba should specialize in the production of
A) coolers and Iceland should specialize in the production of radios.
B) radios and Iceland should specialize in the production of coolers.
C) both goods and Iceland should specialize in the production of neither good.
D) neither good and Iceland should specialize in the production of both goods.

Question

Table 3-2
Assume that Aruba and Iceland can switch between producing coolers and producing radios at a constant rate.
 
-Refer to Table 3-2.Aruba should specialize in the production of
A) coolers and Iceland should specialize in the production of radios. 
B) radios and Iceland should specialize in the production of coolers. 
C) both goods and Iceland should specialize in the production of neither good. 
D) neither good and Iceland should specialize in the production of both goods.

Quizplus · Accepted Answer

Aruba should specialize in the production of radios if it has a comparative advantage in radios, while Iceland should specialize in coolers if it has a comparative advantage in coolers.

Table 3-2 Assume That Aruba and Iceland Can Switch Between Producing Coolers