Post Utme Babcock University 2017 Commerce Question 21

Practice objective / multiple choice question 21 from the 2017 Post Utme Babcock University Commerce examination.

Post Utme Babcock University 2017 Commerce Objective / Multiple Choice
Question 21 POST_UTME_BABCOCK_UNIVERSITY • 2017 • COMMERCE • objective

The concept of comparative advantage in international trade is based on the idea that countries should specialize in producing goods for which they have a lower opportunity cost compared to other countries. Which of the following is a correct example of comparative advantage?

Answer Options

A. Country A produces 100 units of good X and 50 units of good Y, while Country B produces 50 units of good X and 100 units of good Y.
Correct Answer B. Country A produces 100 units of good X and 50 units of good Y, while Country B produces 50 units of good X and 100 units of good Y, but Country A has a lower opportunity cost of producing good X.
C. Country A produces 100 units of good X and 50 units of good Y, while Country B produces 50 units of good X and 100 units of good Y, but Country B has a lower opportunity cost of producing good Y.
D. Country A produces 100 units of good X and 50 units of good Y, while Country B produces 50 units of good X and 100 units of good Y, but both countries have the same opportunity cost of producing both goods.
Correct Answer
B
Correct Option:
Country A produces 100 units of good X and 50 units of good Y, while Country B produces 50 units of good X and 100 units of good Y, but Country A has a lower opportunity cost of producing good X.

About This Question

This is Post Utme Babcock University 2017 Commerce Question 21. It is one of the objective questions from the 2017 Post Utme Babcock University Commerce examination.

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