Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Country A
B
Country B
C
Both countries
D
Neither country
Understanding the Answer
Let's break down why this is correct
Answer
To find out which country has a comparative advantage in producing cloth, we need to look at how much of each product they can make compared to the other. Country A can produce 10 units of cloth or 5 units of wine, meaning for every unit of wine it gives up, it can produce 2 units of cloth. On the other hand, Country B can produce 6 units of cloth or 3 units of wine, which means it gives up 2 units of cloth for every unit of wine. Since Country A gives up less cloth per unit of wine compared to Country B, it has a comparative advantage in producing cloth. This means Country A should focus on making cloth, while Country B might focus on making wine.
Detailed Explanation
Country A has a lower opportunity cost for making cloth. Other options are incorrect because Some might think Country B is better at cloth, but it actually gives up more wine to make cloth than Country A; This choice suggests both countries are equally good at making cloth, which isn't true.
Key Concepts
cost-benefit analysis
Topic
Comparative and Absolute Advantage
Difficulty
easy level question
Cognitive Level
understand
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