Neco 2021 Economics Question 34

Practice objective / multiple choice question 34 from the 2021 Neco Economics examination.

Neco 2021 Economics Objective / Multiple Choice Easy Difficulty
Question 34 NECO • 2021 • ECONOMICS • objective

Country A can produce either 10 units of wheat or 5 units of cloth per labour hour. Country B can produce either 6 units of wheat or 6 units of cloth per labour hour. Identify which country has a comparative advantage in wheat and which in cloth, and state the pattern of specialization under free trade.

Answer Options

A. Both countries have comparative advantage in wheat. Under free trade they should both specialize in wheat.
Correct Answer B. A has comparative advantage in wheat; B has comparative advantage in cloth. Under free trade A should specialize in wheat and B in cloth.
C. B has comparative advantage in wheat; A has comparative advantage in cloth. Under free trade B should specialize in wheat and A in cloth.
D. A has comparative advantage in both wheat and cloth. Under free trade A should specialize in cloth and B in wheat.
Correct Answer
B
Correct Option:
A has comparative advantage in wheat; B has comparative advantage in cloth. Under free trade A should specialize in wheat and B in cloth.

About This Question

This is Neco 2021 Economics Question 34. It is one of the objective questions from the 2021 Neco Economics examination.

Difficulty level: Easy .

View More Neco 2021 Economics Questions More Neco Practice Questions Back to Questions

Master the Exam!

You've seen a preview, but there are thousands more questions plus AI tutor to break down complex solutions.

Unlock Full Access Available for Android & Windows
Chat with Support