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Summary of product condition in countries i and ii Amount of labour days, cocoa(tons) ...

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
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  • 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
Explanation:

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