Home / Aptitude Tests / Economics / Summary of product c...

Summary of product condition in countries I and II:
...

Summary of product condition in countries I and II:

Amount of labour days, cocoa (tons) cloth (tons)
Country I: 200 600 900
country II: 200 300 800

From the above table, we can correctly say with respect to international trade that

 

A.

Country I, has an absolute disadvantage in the production of both cocoa cloth

B.

Country I, has an absolute advantage in the production of both cocoa and cloth

C.

Country II, has an absolute advantage in the production of both cocoa and cloth

D.

Country II, has a comparative advantage in the production of cocoa

E.

Country II, should leave the production of both cocoa and cloth to Country I

Correct answer is B

No explanation has been provided for this answer.