Summary of product condition in countries i and ii
Amount of labour days, cocoa(tons) Cloth(tons)
Country i 200 600 900
country ii 200 300 800
From the above table, we can correctly say in respect of international trade that
A.
Country I has absolute disadvantage in the production of both cocoa cloth
B.
Country I has absolute advantage in the production of both cocoa and cloth
C.
Country II has absolute advantage in the production of both cocoa and cloth
D.
Country II has comparative advantage in the production of cocoa
E.
Country II should leave the production of both cocoa and cloth to country I
Correct Answer: Option B
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