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Suppose that Hungary and Spain both produce cheese and wine. Hungary's opportunity cost of producing a bottle of wine is 3 pounds of cheese. That is, Hungary forgoes the production of 3 pounds of cheese when it produces a bottle of wine. Spain's opportunity cost of producing a bottle of wine is 2 pounds of cheese.
(A. neither Italy or New Zealand, B. both Italy and New Zealand, C. Italy has, D. New Zealand has) a comparative advantage in the production of wine.
(A. neither Italy or New Zealand, B. both Italy and New Zealand, C. Italy has, D. New Zealand has) a comparative advantage in the production of cheese.
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Suppose that Hungary and Spain both produce cheese and wine. Hungary's opportunity cost of producing...
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