The table above indicates labor-hours needed to produce a single unit of each of two commodities in each of two countries. If labor is the only factor used to produce the commodities, which of the following statements must be correct?
I. Country A has an absolute advantage in the production of both commodities but a comparative advantage in the production of wheat.
II. Country B has an absolute advantage in the production of both commodities but a comparative advantage in the production of fish.
III. Mutually advantageous trade can occur between the two countries when 2.5 units of fish are exchanged for 1 unit of wheat.

a. I only
b. I and III
c. II and III
d. III only
e. II only
f. I and II only

The table above indicates labor-hours needed to produce a single unit of each of two commodities in each of two countries. If labor is the only factor used to produce the commodities, which of the following statements must be correct?

Country A has an absolute advantage in the production of both commodities but a comparative advantage in the production of wheat.

Mutually advantageous trade can occur between the two countries when 2.5 units of fish are exchanged for 1 unit of wheat.

Sam1s Sam1s · Answer 2 · 2022-04-05T15:11:48+02:00

The following statements that is correct :

B) I and III

Labor-hours

The table over shows labor-hours required to deliver a single unit of each of two commodities in each of two nations.

In case labor is the as it were figure utilized to create the commodities.

Country A has an outright advantage within the generation of both commodities but a comparative advantage within the generation of wheat.

Mutually beneficial exchange can happen between the two nations when 2.5 units of angle are traded for 1 unit of wheat.

Thus, the correct answer is B.

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