Question

Suppose in country X, for the production of wine it takes 10 labor hours andto produce cloth. While in Country Y, for the production of wine it takesand 10 labor hours to produce cloth. Among both the countries, whichproduce cloth?a) Country Xb) No country should produce clothc) Both country X and Y should produce clothd) Country Y.​

Answer 1

The law of comparative advantage describes how, under free trade, an agent will produce more of and consume less of a good for which they have a comparative advantage.