In Portugal,the opportunity cost of a bale of wool is 3 bottles of wine.In England,the opportunity cost of 1 bottle of wine is 3 bales of wool.Given this information,
A)England has an absolute advantage in wine production.
B)Portugal has an absolute advantage in wool production.
C)Portugal has a comparative advantage in wine production.
D)Portugal has a comparative advantage in wool production.
E)no trade will occur.

Question

Quizplus · Accepted Answer

Portugal has a lower opportunity cost for producing wine (1/3 bale of wool per bottle of wine) compared to England (3 bales of wool per bottle of wine), indicating Portugal has a comparative advantage in wine production.

In Portugal,the Opportunity Cost of a Bale of Wool Is