Question 16
POST_UTME_RHEMA_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. Which of the following is a correct example of comparative advantage?
Answer Options
A.
Country A produces 100 units of wheat and 50 units of cloth, while Country B produces 50 units of wheat and 100 units of cloth.
Correct Answer
B.
Country A produces 100 units of wheat and 50 units of cloth, while Country B produces 50 units of wheat and 100 units of cloth, but Country A has a lower opportunity cost of producing cloth.
C.
Country A produces 100 units of wheat and 50 units of cloth, while Country B produces 50 units of wheat and 100 units of cloth, but Country B has a lower opportunity cost of producing wheat.
D.
Country A produces 100 units of wheat and 50 units of cloth, while Country B produces 50 units of wheat and 100 units of cloth, but both countries have the same opportunity cost of producing both goods.
Correct Answer
B
Correct Option:
Country A produces 100 units of wheat and 50 units of cloth, while Country B produces 50 units of wheat and 100 units of cloth, but Country A has a lower opportunity cost of producing cloth.
About This Question
This is
Post Utme Rhema University
2017
Commerce
Question 16.
It is one of the
objective
questions from the
2017
Post Utme Rhema University
Commerce
examination.