If wage in country A is $6/hour and in country B is £2/hour,and the exchange rate between a $ and a £ is 1£=2$,then given the information in the table,which of the following is true? $\begin{array}{|l|c|c|}
\hline & \text {Country A} &\text { Country B} \
\hline\text { Apple (bushels/hr) }& 8 & 1 \
\hline\text { Orange (bushels/hr)} & 2 & 3 \
\hline
\end{array}$
A)Country A has comparative advantage in apples
B)Country A has comparative advantage in oranges
C)Country B has comparative advantage in apples
D)Country A and B both have comparative advantage in oranges

Question

Quizplus · Accepted Answer

To determine which country has comparative advantage, we look at the opportunity cost of producing each good in each country. 
In country A, to produce one apple, they have to give up producing 2 oranges (6/3=2). 
In country B, to produce one apple, they have to give up producing 4 oranges (2/0.5=4).
Therefore, country A has a lower opportunity cost (2 oranges) to produce one apple compared to country B (4 oranges). Therefore, country A has comparative advantage in producing apples.

If Wage in Country a Is $6/hour and in Country