Question
There are two countries: Country X and Country Y. These countries have the same amount of resources and both produce two goods, umbrellas and hats.
There are two countries: Country X and Country Y. These countries have the same amount of resources and both produce two goods, umbrellas and hats. The opportunity cost of umbrellas in Country X is hats per umbrella and the opportunity cost of umbrellas in Country Y is 4 hats per umbrella.
Which country has a comparative advantage in each good?
- Country Y has a comparative advantage in both goods
- Country X has a comparative advantage in hats; Country Y has comparative advantage in umbrellas
- Country X has a comparative advantage in umbrellas; Country Y has comparative advantage in hats
- Country X has a comparative advantage in both goods
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University Physics with Modern Physics
Authors: Hugh D. Young, Roger A. Freedman
14th edition
978-0133977981
