Assume that Bulgaria has a comparative advantage in producing sandals and Finland imports sandals from Bulgaria.We can conclude that
A)Bulgaria also has an absolute advantage in producing sandals relative to Finland.
B)Bulgaria has a lower opportunity cost of producing sandals relative to Finland.
C)Finland has an absolute disadvantage in producing sandals relative to Bulgaria.
D)labor costs are higher for sandal producers in Finland than in Bulgaria.

Question

Quizplus · Accepted Answer

The fact that Bulgaria has a comparative advantage in producing sandals means that they can produce sandals at a lower opportunity cost compared to Finland. This does not necessarily imply that Bulgaria has an absolute advantage or that labor costs are different between the two countries.

Assume That Bulgaria Has a Comparative Advantage in Producing Sandals