If Spain is capable of producing either tapas or soccer balls or some combination of those two products,then Spain should:
A) produce the good it has an absolute advantage in producing.
B) produce the good it has a comparative advantage in producing.
C) remain self-sufficient if it can produce both efficiently.
D) 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, which means the good it can produce at a lower opportunity cost. If Spain can produce both tapas and soccer balls efficiently, it should focus on producing the good that it can produce relatively more efficiently than the other. By specializing in the production of this good and trading with other countries for the other good, Spain can increase its overall production and consumption.

If Spain Is Capable of Producing Either Tapas or Soccer