Assume that only two countries, A and B, exist.

-Refer to the table above. You are told that Country B is very much larger than country A. The correct answer is
A) country B will export good S.
B) country A will export good S.
C) both countries will export good S.
D) trade will not occur between these two countries.
E) both countries will import good S.

Question

Assume that only two countries, A and B, exist.
 
-Refer to the table above. You are told that Country B is very much larger than country A. The correct answer is
A) country B will export good S. 
B) country A will export good S. 
C) both countries will export good S. 
D) trade will not occur between these two countries. 
E) both countries will import good S.

Quizplus · Accepted Answer

Since country B is larger than country A, it is likely that it has more resources and higher production capabilities. As a result, it is reasonable to assume that country B will export good S to country A, especially if country A does not produce good S efficiently. Therefore, the correct answer is A.

Assume That Only Two Countries, a and B, Exist