Assume that England and Spain each has 40 labor hours available. Originally, each country divided its time equally between the production of cheese and bread. Now, each country spends all its time producing the good in which it has a comparative advantage. As a result, the total output of cheese increased by: a. 15
b. 20
c. 25
d. 40

a. 15

Explanation:

Given;

Labour hours available to each nations.

England = 40 labour hours.

Spain = 40 labour hours.

Solution:

Total production of bread in 40 labour hours for each nation from the table is 15.

England = 10

Spain = 5

Since both nations decided to focus on their strength where they pose comparative advantage, the production of cheese would increase by 15. As this is the amount of bread produced in that time frame of 40 labour hours.

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