Consider the following information about the production of two goods,X and Y,in two countries,A and B:
∙ In Country A it takes Xa units of resources to produce one unit of X and Ya units of resources to produce one unit of Y.
∙ In Country B it takes Xb units of resources to produce one unit of X and Yb units of resources to produce one unit of Y.
∙ Assume the amount of resources used to produce the goods in the two countries can be compared unambiguously.
-Refer to Table 32-1.Country A has a comparative advantage in producing good X if
A) (Xa/Ya) is less than (Xb/Yb) .
B) (Xa/Xb) is greater than (Ya/Yb) .
C) (Xa/Ya) is greater than (Xb/Yb) .
D) Xa is less than Yb.
E) Xa = Xb.
Correct Answer:
Verified
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