Assume that the opportunity cost of producing wheat is lower in Australia compared with Malaysia. Further assume that the opportunity cost of producing cars is higher in Australia compared with Malaysia. Which country should specialise in producing wheat?

Question

Quizplus · Accepted Answer

Since the opportunity cost of producing wheat is lower in Australia, it would be advantageous for them to specialise in producing wheat. Malaysia can then specialise in producing cars, as their opportunity cost of producing cars is lower compared to Australia.

Assume That the Opportunity Cost of Producing Wheat Is Lower