Two nations have the following production capacity given their endowment of resources. Country A can produce 50 units of beer or 80 units of pizzas. Country B can produce 100 units of beer or 90 units of pizzas. Which of the following statements is most appropriate?
A. Country A has a comparative advantage in beer and Country B has an absolute advantage in pizzas.
B. Country A has a comparative advantage in pizza and Country B has a comparative advantage in beer.
C. Country A should specialize in pizza and Country B in beer making.
D. Both answers b and c are correct.
Ans: D. Both answers b and c are correct.
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