The production possibilities for country X are either 6000 bushels of soybeans or 10,000 bushels of wheat.The production possibilities for country Y are 2000 bushels of soybeans and 4000 bushels of wheat.Which of the following is true?
A) Country Y should specialize in the growing of soybeans according to the principle of comparative advantage.
B) Country X is the least-cost producer of wheat.
C) The domestic opportunity cost of wheat production is lower in country Y.
D) The high cost producer of soybeans is country X.
The opportunity cost of producing wheat is 3/5 in country X and ½ in country Y.
Correct Answer:
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