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If Japan Gives Up 10 Bushels of Rice to Produce

Question 115

Multiple Choice

If Japan gives up 10 bushels of rice to produce 1 bicycle,while Australia gives up 5 bushels of rice to produce 1 bicycle,then:


A) the opportunity cost of producing bicycles in Australia is higher than in Japan.
B) Japan has a comparative advantage in the production of bicycles.
C) Australia has an absolute advantage in the production of rice.
D) total output will be highest if Australia specialises in rice and Japan specialises in bicycles.
E) total output will be highest if Japan specialises in rice and Australia specialises in bicycles.

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