You are given the following Classical-type table indicating the number of days of labor input needed to make one unit of output of each of the five commodities in each of the Two countries. Assume that the wage rate in England is £20 per day, that the wage rate in Portugal is 40 euros per day, and that the fixed exchange rate is £1 = 3 euros.
$\begin{array}{llllll}
&\text { Good A } &\text { Good B } & \text { Good C }& \text { Good D } &\text { Good E }\
\hline\text { England } & 1 \text { day } & 5 \text { days } & 2 \text { days } & 1 \text { day } & 4 \text { days } \
\text { Portugal } & 4 \text { days } & 4 \text { days } & 1 \text { day } & 2 \text { days } & 5 \text { days }
\end{array}$

With the given information, what will be the trade pattern if the two countries engage in Trade?
A) England will export good A and import goods B, C, D, and E.
B) England will export goods A and D and import goods B, C, and E.
C) England will export goods A, B, and E and import goods C and D.
D) England will export goods A, B, D, and E and import good C.

Question

You are given the following Classical-type table indicating the number of days of labor input needed to make one unit of output of each of the five commodities in each of the Two countries. Assume that the wage rate in England is £20 per day, that the wage rate in Portugal is 40 euros per day, and that the fixed exchange rate is £1 = 3 euros.
$\begin{array}{llllll}
&\text { Good A } &\text { Good B } & \text { Good C }& \text { Good D } &\text { Good E }\
\hline\text { England } & 1 \text { day } & 5 \text { days } & 2 \text { days } & 1 \text { day } & 4 \text { days } \
\text { Portugal } & 4 \text { days } & 4 \text { days } & 1 \text { day } & 2 \text { days } & 5 \text { days }
\end{array}$

With the given information, what will be the trade pattern if the two countries engage in Trade?
A) England will export good A and import goods B, C, D, and E.
B) England will export goods A and D and import goods B, C, and E.
C) England will export goods A, B, and E and import goods C and D.
D) England will export goods A, B, D, and E and import good C.

Quizplus · Accepted Answer

England has a comparative advantage in producing goods A and D because it requires fewer days of labor to produce these goods compared to Portugal. For goods B, C, and E, Portugal requires fewer or the same number of days as England, indicating a comparative advantage or equal efficiency for Portugal in these goods. Therefore, England will likely export goods A and D, where it is more efficient, and import goods B, C, and E, where Portugal is more efficient or equally efficient.

You Are Given the Following Classical-Type Table Indicating the Number