The table below shows the maximum output of wind turbines or solar arrays that Germany and Vietnam can produce using the same quantity of resources.
| Wind Turbines | Solar Arrays | ||
|---|---|---|---|
| Germany | 180 | or | 60 |
| Vietnam | 80 | or | 40 |
Which one of the following statements is correct?
The opportunity cost of producing a solar array in Germany is 333 wind turbines, which gives Germany the comparative advantage in solar arrays.
Vietnam has a comparative advantage in the production of wind turbines because its opportunity cost is lower.
Germany has a comparative advantage in the production of wind turbines because its opportunity cost is 0.330.330.33 solar arrays compared to Vietnam's 0.50.50.5 solar arrays.
Trade will not be mutually beneficial because Germany has an absolute advantage in both goods.
310 exam-style questions on AQA A Level Economics 2.6 The international economy (A-level only), covering 2.6.1 Globalisation, 2.6.2 Trade, 2.6.3 The balance of payments, 2.6.4 Exchange rate systems, and 2.6.5 Economic growth and development. Each one has a worked solution and a mark scheme showing where the marks go.