If in country A it takes 6 units of labour to produce one unit of cloth and 10 units of labour for one unit of wine, while country B takes 4 units & 5 units of labour to produce one unit of cloth and one unit of wine respectively, then
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Theories of international trade has come up 151 times in 6 exams since 2006.
This question is on Absolute and comparative advantage, part of Theories of international trade in International Economics.
Why countries trade: producing more cheaply in absolute terms, or at lower opportunity cost.
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Question from the UoH 2017 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.