Use the table below to answer the following question. The table outlines the production possibilities for two hypothetical countries.
Which of the following statements is true?

Question

Use the table below to answer the following question. The table outlines the production possibilities for two hypothetical countries. 
Which of the following statements is true?

Quizplus · Accepted Answer

According to the concept of comparative advantage, Redland should specialize in producing the good in which its opportunity cost is lower. In this case, Redland has a lower opportunity cost of producing mutton, as it can produce 12 units of mutton in exchange for only 4 units of oats, whereas Blueland would have to give up 5 units of mutton to produce 4 units of oats. Therefore, Redland should specialize in producing mutton and trade with Blueland for oats.

Use the Table Below to Answer the Following Question