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.Iceland should export
A) coolers and import radios.
B) radios and import coolers.
C) both goods and import neither good.
D) neither good and import 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.Iceland should export
A) coolers and import radios. 
B) radios and import coolers. 
C) both goods and import neither good. 
D) neither good and import both goods.

Quizplus · Accepted Answer

Iceland has a comparative advantage in producing coolers and a comparative disadvantage in producing radios. Therefore, Iceland should export coolers and import radios.

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