Country A's cost of widgets is $4.00 and cost of wadgets is $8.00. Country B's cost of widgets is 8 euros and cost of wadgets is 16 euros. Which of the following would you suggest?
A. Trade of widgets for wadgets would not benefit the countries.
B. Country A should specialize in wadgets and Country B in widgets.
C. Both countries should produce an equal amount of each.
D. Country A should specialize in widgets and Country B in wadgets.
Answer: A
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A) would; would B) would; would not C) would not; would D) would not; would not
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Indicate whether the statement is true or false