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Q. |
Suppose the world consists of two countries: the UK and Spain. Further, suppose there are only two goods--food and clothing. Which of the following statements is true? |
A. | If the UK has an absolute advantage in the production of food, then Spain must have an absolute advantage in the production of clothing. |
B. | If the UK has a comparative advantage in the production of food, Spain might also have a comparative advantage in the production of food. |
C. | If the UK has a comparative advantage in the production of food, it must also have a comparative advantage in the production of clothing |
D. | If the UK has a comparative advantage in the production of food, then Spain must have a comparative advantage in the production of clothing |
Answer» D. If the UK has a comparative advantage in the production of food, then Spain must have a comparative advantage in the production of clothing |
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