📚 Learning Guide
Comparative Advantage Analysis
easy

If Country A specializes in producing textiles at a lower opportunity cost than Country B, then Country B would be better off specializing in which of the following goods if it has a comparative advantage in that production? A:B :: C:?

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Learning Path
Learning Path

Question & Answer
1
Understand Question
2
Review Options
3
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4
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Choose the Best Answer

A

Electronics

B

Textiles

C

Agricultural products

D

Pharmaceuticals

Understanding the Answer

Let's break down why this is correct

Answer

If Country A can produce textiles more efficiently than Country B, it means Country A has a comparative advantage in textiles. This allows Country B to focus on producing goods where it is relatively better, or has a comparative advantage. For example, if Country B is better at producing electronics than textiles, it should specialize in electronics. By doing this, both countries can trade and benefit from each other's strengths. So, if A specializes in textiles, then B would be better off specializing in electronics.

Detailed Explanation

Country B should focus on making agricultural products. Other options are incorrect because Some might think electronics are a good choice; Choosing textiles seems logical, but Country A is better at that.

Key Concepts

Comparative Advantage
Opportunity Cost
International Trade
Topic

Comparative Advantage Analysis

Difficulty

easy level question

Cognitive Level

understand

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