Use the following table showing production possibilities for tea and coffee from one unit of resources in Country K and one unit of resources in Country L.

-Based on the principle of comparative advantage, Country K should:

Question

Use the following table showing production possibilities for tea and coffee from one unit of resources in Country K and one unit of resources in Country L.
 
-Based on the principle of comparative advantage, Country K should:

Quizplus · Accepted Answer

The principle of comparative advantage suggests that a country should produce and export goods for which it has a lower opportunity cost of production compared to other countries, and import goods for which other countries have a lower opportunity cost of production. Without specific data, the correct choice is based on the principle that Country K should specialize in producing the good for which it has a comparative advantage (in this case, tea) and import the other good (coffee) from Country L, which presumably has a comparative advantage in producing coffee.

Use the Following Table Showing Production Possibilities for Tea and Coffee