Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Country A
B
Country B
C
Neither country
D
Both countries have the same advantage
Understanding the Answer
Let's break down why this is correct
Answer
To find out which country has a comparative advantage in cheese production, we need to look at how much each country gives up to produce cheese instead of wine. Country A can make 10 units of wine or 5 units of cheese, so for every unit of cheese it produces, it gives up 2 units of wine. Country B can make 6 units of wine or 2 units of cheese, meaning it gives up 3 units of wine for each unit of cheese. Since Country A gives up fewer units of wine to produce cheese compared to Country B, it has the comparative advantage in cheese production. Therefore, Country A should focus on making cheese, while Country B should focus on wine.
Detailed Explanation
Country B has a lower opportunity cost for making cheese. Other options are incorrect because Some might think Country A is better at making cheese; This option suggests that neither country can produce cheese efficiently.
Key Concepts
Comparative Advantage
Opportunity Cost
Trade Benefits
Topic
Comparative and Absolute Advantage
Difficulty
medium level question
Cognitive Level
understand
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