Country A exports LRVs and Country B exports buses.
This is because Country A has a comparative advantage in producing LRVs as they can produce more LRVs than Country B, while Country B has a comparative advantage in producing buses as they can produce more buses than Country A. This means that it would be more beneficial for each country to specialize in the product that they can produce most efficiently and then trade with each other.
The table below provides information on the production of products in two countries. Use the law of comparative advantage to choose the statement that describes the products that each country will export to the other country.
Light Rail Vehicles (LRVs) Buses
Country A 500 1000
Country B 450 1350
(1 point)
Responses
Country A exports LRVs and Country B exports buses.
Country A exports buses and Country B exports LRVs.
Country A exports buses and Country B exports buses.
Country A exports LRVs and Country B exports LRVs.
1 answer
1 answer