If Spain is capable of producing either tapas or soccer balls or some combination of those two products,then:
A)Spain should produce the good it has an absolute advantage in producing.
B)Spain should produce the good it has a comparative advantage in producing.
C)Spain should remain self-sufficient if it can produce both efficiently.
D)Spain should trade only if it possesses the absolute advantage in the production of both goods.

Question

Quizplus · Accepted Answer

Spain should produce the good it has a comparative advantage in producing. This means that Spain should produce the good in which it has a lower opportunity cost. If Spain can produce tapas at a lower opportunity cost than soccer balls, then it should produce tapas and trade with another country for soccer balls. This would allow Spain to maximize its overall output and benefit from specialization and trade.

If Spain Is Capable of Producing Either Tapas or Soccer