Economics 9708 · AS & A Level · International trade and free trade

International trade and free trade — practice question

Countries M and N account for the world’s supply of machines and textiles. The table shows the output of each country when its resources are split equally between the two products. What should occur according to the principle of comparative advantage?

  • ACountry M should produce both machines and textiles.
  • BCountry M should specialise in the production of machines, country N should specialise in production of textiles.
  • CCountry M should specialise in the production of textiles, country N should specialise in production of machines.
  • DCountry N should produce both machines and textiles.

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