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Specialisation and trade

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Question 8

The table below shows the number of labour hours required to produce one unit of wind turbines and one unit of solar panels in Alfaland and Betaland:

CountryWind Turbines (hours per unit)Solar Panels (hours per unit)
Alfaland63
Betaland108

Based on this information, which of the following statements is correct?

Alfaland has a comparative advantage in both wind turbines and solar panels.

Betaland has a comparative advantage in wind turbines, and Alfaland has a comparative advantage in solar panels.

Alfaland has a comparative advantage in wind turbines, and Betaland has a comparative advantage in solar panels.

Betaland has an absolute advantage in solar panels, and Alfaland has a comparative advantage in wind turbines.

Specialisation and trade Questions

  1. A Level
  2. /Economics
  3. /Specialisation and trade