The table below shows the number of labor hours required to produce one gallon of wine and one pound of cheese in the United States and France. The United States has an absolute advantage in the production of Labor hours to make:In the United StatesIn France1 gallon of wine4.001.001 pound of cheese1.002.00
A. only cheese.
B. both wine and cheese.
C. only wine.
D. neither wine nor cheese.
Answer: A
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Refer to the data below. Assume that Wat originally produced rice and corn at combination C and that Xat originally produced combination B. If the nations now fully specialized based on comparative advantage, the total gains from specialization and trade are:
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D. 100 units of rice and 150 units of corn