Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Country A
B
Country B
C
Neither country has a comparative advantage
D
Both countries have the same opportunity cost in producing wine
Understanding the Answer
Let's break down why this is correct
Answer
To determine which country has a comparative advantage in wine production, we need to look at the opportunity costs of producing wine in each country. Country A can produce either 10 units of cloth or 5 units of wine, meaning for every unit of wine, it gives up 2 units of cloth. On the other hand, Country B can produce 6 units of cloth or 6 units of wine, so for each unit of wine, it only gives up 1 unit of cloth. Since Country B sacrifices fewer cloth units to produce wine, it has a comparative advantage in wine production. Therefore, Country B should specialize in making wine, while Country A focuses on cloth.
Detailed Explanation
Country B has a lower opportunity cost for making wine. Other options are incorrect because Some might think Country A is better because it makes more wine; This option suggests both countries are equal in wine production.
Key Concepts
Comparative Advantage
Opportunity Cost
International Trade
Topic
Comparative Advantage Analysis
Difficulty
hard level question
Cognitive Level
understand
Ready to Master More Topics?
Join thousands of students using Seekh's interactive learning platform to excel in their studies with personalized practice and detailed explanations.