If the opportunity cost of 1 table is 5 chairs in nation A and 1 chair in nation B, it makes sense for nation B to produce chairs?
False. A country should produce whichever good it has a comparative advantage, i.e. lower opportunity cost, in producing. Country A has to give up making only 1 table to make 5 chairs, so its opportunity cost of making chairs is 0.2 tables. Country B has to give up making 1 table to make 1 chair, so its opportunity cost of making chairs is 1 chair. Country A should produce chairs because it has a comparative advantage.
