Gce Model Questions Vol1 2019 Economics Question 37

Practice objective / multiple choice question 37 from the 2019 Gce Model Questions Vol1 Economics examination.

Gce Model Questions Vol1 2019 Economics Objective / Multiple Choice Easy Difficulty
Question 37 GCE_MODEL_QUESTIONS_VOL1 • 2019 • ECONOMICS • objective

Country A can produce either 10 units of wheat or 5 units of cloth per day. Country B can produce either 6 units of wheat or 6 units of cloth per day. Using opportunity‑cost analysis, determine which country has a comparative advantage in wheat and which in cloth, and state how each country should specialize.

Answer Options

A. Country B has comparative advantage in both wheat and cloth, so it should specialise in wheat while Country A does not specialise.
B. Country A has comparative advantage in cloth; Country B has comparative advantage in wheat. Hence A should specialise in cloth and B in wheat.
C. Both countries have comparative advantage in wheat, so they should both specialise in wheat.
Correct Answer D. Country A has comparative advantage in wheat; Country B has comparative advantage in cloth. Hence A should specialise in wheat and B in cloth.
Correct Answer
D
Correct Option:
Country A has comparative advantage in wheat; Country B has comparative advantage in cloth. Hence A should specialise in wheat and B in cloth.

About This Question

This is Gce Model Questions Vol1 2019 Economics Question 37. It is one of the objective questions from the 2019 Gce Model Questions Vol1 Economics examination.

Difficulty level: Easy .

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