Table 3-38
Assume that England and Spain can switch between producing cheese and producing bread at a constant rate.

-Refer to Table 3-38. England should export
A)cheese and import bread.
B)bread and import cheese.
C)both goods and import neither good.
D)neither good and import both goods.

Question

Table 3-38
Assume that England and Spain can switch between producing cheese and producing bread at a constant rate.
​ 
-Refer to Table 3-38. England should export
A)cheese and import bread. 
B)bread and import cheese. 
C)both goods and import neither good. 
D)neither good and import both goods.

Quizplus · Accepted Answer

England has a comparative advantage in producing cheese as its opportunity cost of producing cheese (giving up bread) is lower than Spain's. Therefore, England should specialize in producing cheese and export it to Spain, while importing bread from Spain.

Table 3-38 Assume That England and Spain Can Switch Between Producing Cheese