If France is capable of producing either cheese or wine or some combination of those two products,then France should:
A) produce the one it is more efficient at producing.
B) produce the one for which it has a comparative advantage.
C) produce the one for which it has a higher opportunity cost.
D) remain self-sufficient if it has the absolute advantage in the production of both.

Question

Quizplus · Accepted Answer

France should produce the good for which it has a comparative advantage. This means that France can produce one of the goods at a lower opportunity cost than the other. By focusing on the production of the good in which it has a comparative advantage, France can trade with other countries that have a comparative advantage in producing the other good. This allows France to specialize in the production of the good in which it has a comparative advantage, trade with other countries, and ultimately achieve higher levels of economic output and well-being.

If France Is Capable of Producing Either Cheese or Wine