Comparative Advantage and Specialization
Assume that Country P and Country Q produce only rice and textiles. Country P can produce a maximum of 100 tons of rice or 50 units of textiles, and Country Q can produce a maximum of 60 tons of rice or 40 units of textiles. If both countries specialize according to their comparative advantage, what is the resulting combined output?
A
100 tons of rice and 40 units of textiles
B
0 tons of rice and 90 units of textiles
C
160 tons of rice and 0 units of textiles
D
100 tons of rice and 30 units of textiles
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