The opportunity cost of producing a pair of pants in the USA is 5 bushels of wheat, while in China, it is 2 bushels of wheat. As a result:
a. there can be mutual gains from trade to the two countries if the USA exports wheat to China in exchange for pants
b. The USA has a comparative advantage over China in the production of pants.
c. China has a comparative advantage over the USA in the production of wheat
d. there can be mutual gains from trade to the two countries if the USA exports pants to China in exchange for wheat.
Answer: a. there can be mutual gains from trade to the two countries if the USA exports wheat to China in exchange for pants
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