Suppose Ireland exports beer to China and imports pineapples from the United States.This situation suggests that
A)Ireland has a comparative advantage relative to the United States in producing pineapples,and China has a comparative advantage relative to Ireland in producing beer.
B)Ireland has a comparative advantage relative to China in producing beer,and the United States has a comparative advantage relative to Ireland in producing pineapples.
C)Ireland has an absolute advantage relative to the United States in producing pineapples,and China has an absolute advantage relative to Ireland in producing beer.
D)Ireland has an absolute advantage relative to China in producing beer,and the United States has an absolute advantage relative to Ireland in producing pineapples.

Question

Quizplus · Accepted Answer

The fact that Ireland exports beer to China suggests that Ireland has a comparative advantage in producing beer relative to China. Similarly, the fact that Ireland imports pineapples from the United States suggests that the United States has a comparative advantage in producing pineapples relative to Ireland. Therefore, Option B is correct. Option A is incorrect because it suggests that Ireland produces pineapples, which is not given in the scenario. Option C is incorrect because absolute advantage refers to a country's ability to produce a good at a lower cost than another country, and such information is not given in the scenario. Option D is incorrect because it suggests that Ireland has an absolute advantage in producing beer, which is not given in the scenario.

Suppose Ireland Exports Beer to China and Imports Pineapples from the United