Belarus has a comparative advantage in the production of linen and an absolute advantage in the production of beer,compared to Russia.If these two countries decide to trade,what would the pattern of trade be?
A)Belarus would export linen to Russia.
B)Russia would export linen to Belarus.
C)Belarus would export both beer and linen to Russia.
D)Russia would export both beer and linen to Belarus.

Question

Quizplus · Accepted Answer

Belarus has a comparative advantage in the production of linen, meaning they can produce linen at a lower opportunity cost than Russia can. On the other hand, Belarus only has an absolute advantage in the production of beer, meaning they can produce more beer than Russia but not necessarily at a lower opportunity cost. Therefore, Belarus would specialize in the production of linen and export it to Russia while importing beer from Russia.

Belarus Has a Comparative Advantage in the Production of Linen