Use the basis of the following information.
Country E can produce 10 tons of coal or 2 tons of wheat with one unit of resources.
Country F can produce 10 tons of coal or 5 tons of wheat with one unit of resources.
-If the principle of comparative advantage is followed, Country E should:

Question

Quizplus · Accepted Answer

Country E has a comparative advantage in producing coal because it gives up less wheat to produce coal than Country F does (1 unit of resources produces 10 tons of coal or 2 tons of wheat in Country E, compared to 10 tons of coal or 5 tons of wheat in Country F). Country F has a comparative advantage in producing wheat because it gives up less coal to produce wheat than Country E does. Therefore, according to the principle of comparative advantage, Country E should specialize in producing coal and buy its wheat from Country F.

Use the Basis of the Following Information