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Consider Two Country Countries, a and B, with Two Goods

Question 20

Multiple Choice

Consider two country countries, A and B, with two goods, X and Y. Find the false statement from the following statements:


A) If the country A has comparative advantage in X, it means the country A has lower opportunity costs of producing X than that in country B.
B) If the country B has comparative advantage in Y, it means the country B has lower opportunity costs of producing Y than that in country A.
C) Country A can have absolute advantage in both X and Y, but country A cannot have comparative advantage in both X and Y.
D) Country B cannot have absolute advantage in both X and Y

Correct Answer:

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