Suppose countries Alphania and Betania produce electronics and apparel using identical resources Which of the following is true if Alphania exports electronics to and imports apparel from Betania within a free- trade system? A The opportunity cost of producing electronics is higher in Alphania than in Betania. B Betania has a comparative advantage in producing apparel and Alphania has a comparative advantage in producing electronics. C Alphania must be specializing in apparel, while Betania is specializing in electronics. Warbarn in Alnh ninding mn nin Datania

The correct answer is B. Betania has a comparative advantage in producing apparel and Alphania has a comparative advantage in producing electronics.<br /><br />In a free-trade system, countries will export goods in which they have a comparative advantage and import goods in which other countries have a comparative advantage. Comparative advantage refers to the ability of a country to produce a good at a lower opportunity cost compared to other countries.<br /><br />In this case, since Alphania exports electronics to Betania and imports apparel from Betania, it indicates that Alphania has a comparative advantage in producing electronics, while Betania has a comparative advantage in producing apparel. This means that Alphania can produce electronics at a lower opportunity cost compared to Betania, and Betania can produce apparel at a lower opportunity cost compared to Alphania.