Suppose that a worker in Country A can make either 10 iPods or 5 tablets each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPods or 10 tablets each year. Country B has 200 workers. Which of the following is true?
A. Neither country can benefit from trade since no comparative advantage exists.
B. Country B should produce iPods and Country A should produce tablets, and they could benefit from trade.
C. Because Country B has the absolute advantage in producing tablets, they should specialize in the production of tablets.
D. Country B should produce tablets and Country A should produce iPods, and they could benefit from trade.
Answer: D
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