The table below outlines the possible tradeoffs of producing beer and cheese for Germany and Holland.
Germany |
Holland |
Cheese |
Beer |
Cheese |
Beer |
0 |
10 |
0 |
6 |
5 |
0 |
4 |
0 |
Which of the following statements is
most accurate?
A. Both countries would gain if Germany traded cheese for Holland's beer.
B. Germany would not gain from trade, because it has an absolute advantage in the production of both goods.
C. Both countries would gain if Germany traded beer for Holland's cheese.