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Advanced Placement (AP), 28.09.2021 19:40, fatosis
In the country Gamma it takes 6 hours to produce one automobile and 1 hour to produce a bale of cotton. In the country Delta it takes 10 hours to produce one automobile and 2.5 hours to produce a bale of cotton. Which of the following is true? (2 points)
The countries cannot benefit from specialization and trade.
Delta has an absolute advantage in producing cotton and a comparative advantage in producing automobiles.
Delta has an absolute advantage in producing both automobiles and cotton.
Gamma has an absolute advantage in producing both goods and a comparative advantage in producing cotton.
Gamma would benefit from trading between 6 automobiles for one bale of cotton.
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