Refer to the information provided in Figure 33.1 below to answer the question(s) that follow.
Figure 33.1Refer to Figure 33.1. Which of the following statements is true?
A. Trade will benefit both countries because the United States has a comparative advantage in the production of soybeans and Canada has a comparative advantage in the production of alfalfa.
B. Trade will benefit neither country because the United States has an absolute advantage in the production of both soybeans and alfalfa, but Canada has a comparative advantage in the production of both soybeans and alfalfa.
C. Trade will benefit both countries because the United States has a comparative advantage in the production of alfalfa and Canada has a comparative advantage in the production of soybeans.
D. Only Canada can benefit from trade because the United States has an absolute advantage in the production of both soybeans and alfalfa.
Answer: C
You might also like to view...
Goods whose income elasticities are negative are called
A) normal goods. B) superior goods. C) inferior goods. D) complements.
A price floor is a legal minimum on the price at which a good or service can be sold
a. True b. False Indicate whether the statement is true or false
A cut in government spending, a decrease in income abroad, an increase in taxes, or an expectation that future consumer income will fall will all cause aggregate:
A. demand to shift rightward. B. demand to shift leftward. C. supply to shift rightward. D. supply to shift leftward.
Figure 18.1Refer to Figure 18.1. Canada has a comparative advantage in the production of:
A. bicycles. B. hang gliders. C. both bicycles and hang gliders. D. neither bicycles nor hang gliders.