1. Which country has the absolute advantage in the production of cars?

A) Country A only
B) Country B only
C) Neither has an absolute advantage.
D) Both have an absolute advantage.
E) Cannot be determined.

2. Which country has the comparative advantage in the production of trucks?

A) Country A only
B) Country B only
C) Neither has a comparative advantage.
D) Both have a comparative advantage.
E) Cannot be determined.

3. A good terms of trade would fall between what two ratios?

A) 1 truck : 1 car and 1 truck : 2 cars
B) 1 car : 1 truck and 1 car : 2 trucks
C) 5 cars : 8 trucks and 5 trucks : 4 cars
D) No trade should take place.
E) Cannot be determined.