-Use the above table. Assuming constant opportunity costs, if countries Alpha and Beta specialize based on comparative advantage, then
A)Alpha should specialize in knives and Beta should specialize in forks.
B)Alpha should specialize in forks and Beta should specialize in knives.
C) Alpha should specialize in producing both items.
D)Beta should produce both items.

Question

-Use the above table. Assuming constant opportunity costs, if countries Alpha and Beta specialize based on comparative advantage, then
A)Alpha should specialize in knives and Beta should specialize in forks. 
B)Alpha should specialize in forks and Beta should specialize in knives. 
C) Alpha should specialize in producing both items. 
D)Beta should produce both items.

Quizplus · Accepted Answer

Alpha has a comparative advantage in knives because it can produce knives at a lower opportunity cost than forks. Beta has a comparative advantage in forks because it can produce forks at a lower opportunity cost than knives. Therefore, if countries Alpha and Beta specialize based on comparative advantage, then Alpha should specialize in knives and Beta should specialize in forks.

-Use the Above Table