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2.6 The international economy (A-level only)

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Question 14

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 TurbinesSolar Arrays
Germany180or60
Vietnam80or40

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.

2.6 The international economy (A-level only) Questions

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  3. /2.6 The international economy (A-level only)