If compared to Akerji, Bunyan can produce palm oil by giving up less of an alternative good
Then, Bunyan has
A) a higher foreign-trade multiplier than Akerji.
B) a lower foreign-trade multiplier than Akerji.
C) an absolute advantage in palm oil production.
D) a comparative advantage in palm oil production.

Question

Quizplus · Accepted Answer

If Bunyan can produce palm oil by giving up less of an alternative good, it means that they have a comparative advantage in producing palm oil compared to Akerji. Therefore, the best answer is D. The foreign-trade multiplier is not relevant for this question.

If Compared to Akerji, Bunyan Can Produce Palm Oil by Giving