The diagram presents the production possibility curves for two economies when all resources are fully employed. Country X is able to make 10 million cars or 20 million bicycles, and country Y is able to make 20 million cars or 40 million bicycles. Based on the theory of comparative advantage, which statement about country X and country Y is correct?
- ACountry X and country Y would not gain from free trade.
- BCountry X has a lower opportunity cost ratio in producing cars and bicycles than country Y.
- CCountry X has an absolute advantage over country Y in the production of both goods.
- DCountry Y will have a faster rate of economic growth than country X.