27Comparative Advantage TradeHard1 mark
The table shows different possible outputs of apples and bananas for country X and country Y
assuming only two goods are produced and all resources are used to their maximum.
| apples | bananas | ||
|---|---|---|---|
| country X | 100 | or | 80 |
| country Y | 50 | or | 25 |
Country Y decides to specialise in the production of the good in which it has a
comparative advantage.
Country X decides to use 75% of its resources to produce the good in which it has a comparative
advantage and 25% of its resources to produce the other good.
What will be the total output?
| apples | bananas | |
|---|---|---|
| A | 50 | 80 |
| B | 75 | 45 |
| C | 75 | 60 |
| D | 150 | 120 |