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Social Studies, 18.04.2020 02:43 jackrider6563
The table above indicates labor-hours needed to produce a single unit of each of two commodities in each of two countries. If labor is the only factor used to produce the commodities, which of the following statements must be correct?
I. Country A has an absolute advantage in the production of both commodities but a comparative advantage in the production of wheat.
II. Country B has an absolute advantage in the production of both commodities but a comparative advantage in the production of fish.
III. Mutually advantageous trade can occur between the two countries when 2.5 units of fish are exchanged for 1 unit of wheat.
a. I only
b. I and III
c. II and III
d. III only
e. II only
f. I and II only
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