Question

Which of the follow is true of the trade relationship between Country A and Country B?
Country A has an absolute advantage in producing yarn and fabric
Country B has an absolute advantage in producing yarn and fabric
Country B has a comparative advantage to Country A in producing fabric
Country A has a comparative advantage to Country B in producing fabric

Answer 1

I believe the answer is D. Hope this helps :)

Answer 2

What is true of the trade relationship between country A and B is when Country A has a comparative advantage to Country B in producing fabric.

What is trade relationship?

Trade relationship is a relationship that exist between countries or from that are involved bin doing businesses together.

The firm and countries buy from each other leading to exchange of goods or services among themselves.

Therefore, Country A has a comparative advantage to Country B in producing fabric is true of the trade relationship between country A and B.

Learn more on trade relationship here,

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