Comparative Advantage via Opportunity Costs

Steps:

• Calculate opportunity cost of rice for each country: cotton forgone per unit of rice (total cotton / total rice when resources split equally).
• Calculate opportunity cost of cotton for each country: rice forgone per unit of cotton (total rice / total cotton).
• Identify lower opportunity cost: country with lower cost for a good has comparative advantage in it.
• Match to statements: select option aligning with cost comparisons.

Why B is correct:

• Comparative advantage means lower opportunity cost; table shows X sacrifices less rice per cotton unit than Y, so X specializes in cotton.

Why the others are wrong:

• A: Y's rice cost is lower (higher output efficiency), not higher.
• C: Costs differ, so specialization beats equal production.
• D: Absolute advantage may vary, but comparative focuses on relative costs, not both goods.

Final answer: B