Question

Country X can cut, prepare, and export lumber using fewer worker hours than Country Y. Country Y can produce lumber but produces cars more efficiently than it produces lumber. It also produces cars more efficiently than Country X. Which of these statements is accurate?

A. Country X will import Country Y's lumber due to absolute advantageB. Country X will import Country Y's lumber due to comparative advantageC.Country Y will import Country X's lumber due to comparative advantageD. Country Y will import Country Y's lumber due to absolute advantage

Answer 1

C. Country Y will import Country X's lumber due to comparative advantage

Step-by-step explanation:

In economics, comparative advantage may be defined as the ability of a person or any organisation to perform an economic activity or produce a certain product more effectively and efficiently than other activity or product. The person or organisation who has a comparative advantage in a particular product will consume less and will produce more of the product for having an comparative advantage for that produce.

Thus in the context, Country X produce lumber more efficiently that Country Y. Country X have a comparative advantage for lumber produce than Country Y. So, due to Country Y will import lumber from Country X because Country X has a comparative advantage in the production of lumber.

Therefore the correct option is -- (C)