Two countries, Northland and Southland, make two goods, food and drink. The table indicates the number of hours each country must spend to produce one unit of each product. Once they have specialised in line with comparative advantage, they choose to trade. Which exchange rate will enable both countries to gain from trade?
- A1 unit of food to 2 1/2 unit of drink
- B1 unit of food to 1 unit of drink
- C1 unit of food to 2 units of drink
- D1 unit of food to 3 units of drink