Apples Bananas Country A Country B 800 O a b С Od 500 1500 If all resources of Country A and Country B were dedicated toward the production of either apples or bananas, the maximum production of each is summarized in the table above. In order for both countries to benefit from trade, which country should specialize in banana productio and why? 1600 Review Answers Country A since it has the absolute advantage in banana production. Country A since it has the comparative advantage in banana production. Country B since it has the comparative advantage in banana production. Country B since it has the absolute advantage in banana production. Saved at 8:09 am
Apples Bananas Country A Country B 800 O a b С Od 500 1500 If all resources of Country A and Country B were dedicated toward the production of either apples or bananas, the maximum production of each is summarized in the table above. In order for both countries to benefit from trade, which country should specialize in banana productio and why? 1600 Review Answers Country A since it has the absolute advantage in banana production. Country A since it has the comparative advantage in banana production. Country B since it has the comparative advantage in banana production. Country B since it has the absolute advantage in banana production. Saved at 8:09 am
Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781305971509
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter9: Application: International Trade
Section: Chapter Questions
Problem 1CQQ
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