Use the accompanying table to answer the following questions:
Table 3-6

-Refer to Table 3-6.If England and Spain specialize and trade based on the principle of comparative advantage,England will export
A)bread and Spain will export cheese.
B)bread and Spain will export bread.
C)cheese and Spain will export cheese.
D)cheese and Spain will export bread.

Question

Use the accompanying table to answer the following questions:
Table 3-6
 
-Refer to Table 3-6.If England and Spain specialize and trade based on the principle of comparative advantage,England will export
A)bread and Spain will export cheese. 
B)bread and Spain will export bread. 
C)cheese and Spain will export cheese. 
D)cheese and Spain will export bread.

Quizplus · Accepted Answer

England has a comparative advantage in producing bread because its opportunity cost of producing bread (giving up 1 unit of cheese) is lower than Spain's, while Spain has a comparative advantage in producing cheese because its opportunity cost of producing cheese (giving up 2 units of bread) is lower than England's. Therefore, England will export bread and Spain will export cheese.

Use the Accompanying Table to Answer the Following Questions