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Assume that two small countries, A and B, produce two commodities, X and Y, and that there are no transport costs. One unit of resource utilized in Country A produces 40 units of X or 80 units of Y. One unit of resource utilised in Country B produces 15 units of X or 25 units of Y. According to the law of comparative advantage, which one of the following statements is true? A. Country A has a comparative advantage over Country B in producing Y B. Country A has an absolute advantage over B in producing both products and so will not trade C. Country B has a comparative advantage over Country A in producing Y D. Country A has a comparative advantage over Country B in producing X |