Countries A and B produce only rubber bands and paper clips under the production possibilities schedules shown below:

- Which of the following statements is true?

Question

Countries A and B produce only rubber bands and paper clips under the production possibilities schedules shown below:

- Which of the following statements is true?

Quizplus · Accepted Answer

A country has a comparative advantage in producing a good if it can produce it at a lower opportunity cost than another country. The statement suggests that Country A has a comparative advantage in rubber bands, which implies it can produce rubber bands more efficiently relative to paper clips compared to another country.

Countries a and B Produce Only Rubber Bands and Paper