Suppose that a worker in Country A can make either 25 bananas or 5 tomatoes each year.Country A has 200 workers.Suppose a worker in Country B can make either 18 bananas or 6 tomatoes each year.Country B has 400 workers.The workers in Country B will benefit from trade if they:
A) specialize in bananas because they have a comparative advantage in banana production.
B) specialize in tomatoes because their opportunity cost of tomatoes is higher than Country A's.
C) specialize in tomatoes because their opportunity cost of tomatoes is lower than Country A's.
D) specialize in bananas because they have an absolute advantage in banana production.

Question

Quizplus · Accepted Answer

Country B should specialize in tomatoes because their opportunity cost of producing tomatoes (3 bananas per tomato) is lower than Country A's opportunity cost (5 bananas per tomato), giving them a comparative advantage in tomato production.

Suppose That a Worker in Country a Can Make Either