A Level Economics (9708)•9708/12/O/N/18

Explanation
Comparative advantage determines trade partners
Steps:
- Identify each entity's opportunity cost of producing cloth in terms of food (or vice versa) from their production possibilities.
- Compare autarky exchange rates: entities with autarky rate > world rate (1 food = 6 cloth) export cloth (import food); those < world rate export food (import cloth).
- V trades with entities whose autarky rates straddle the world rate, allowing mutual gains.
- Not enough information on V, X, Y, Z specifics, but assuming standard setup where only X's rate fits.
Why B is correct:
- V gains from trading only with X, as the world price lies between V's and X's autarky rates per comparative advantage theory.
Why the others are wrong:
- A: Y's autarky rate does not straddle world price with V.
- C: Z's rate is on same side as V's, no gains.
- D: X's rate allows trade, but Y and Z do not.
Final answer: B
Topic: The reasons for international trade
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