Summary of production conditions in countries l and ll.
From the 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 and cloth
- B Country I has absolute advantage in the prodcttion of both cocoa and cloth
- C Country ll has absolute advantage in the production of both cocoa and cloth
- D Country ll has a comparative advantage in the production of cocoa
- E Country ll should leave the production of both cocoa and cloth to country l.
Correct Answer: Option B
Explanation:
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