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Country A can produce either 100 units of wheat or 50 units of cloth, and Country B can produce either 80 units of wheat or 80 units of cloth. Which country has the comparative advantage in cloth?

Country A, because it can produce more wheat Country A, because its opportunity cost of cloth is lower Country B, because its opportunity cost of cloth is lower Neither country, because the opportunity costs are equal

Correct Answer:

Country B, because its opportunity cost of cloth is lower

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