Note AcademyNote Academy
Start

Economics (AS & A Level) · Oct / Nov 2024 · Paper 11 · Question 26

9708The reasons for international trade

Using all their resources efficiently, country X can produce 6 million tonnes of wheat or 2 million tonnes of steel whilst country Y can produce 4 million tonnes of wheat or 1 million tonnes of steel. Based on this information, what does the theory of comparative advantage suggest?

  1. ACountry X should produce only steel.
  2. BCountry X will not gain from international trade.
  3. CCountry Y has no comparative advantage.
  4. DCountry Y will not gain from international trade.

As printed in the paper

Show the answer

Correct answer: A. Country X should produce only steel.

Sit this whole paper →More on The reasons for international trade

Make a free account to save your answers and see your weak topics and ask the AI why a wrong answer is wrong.