Asked by Briana Robinson on May 28, 2024
Verified
(Table: Production Possibilities for the United States and Canada) Use Table: Production Possibilities for the United States and Canada.Both nations can produce cars and lumber.If these nations trade,Canada has the comparative advantage in _____ and should trade _____ to the United States in exchange for _____.
A) cars;cars;lumber.
B) lumber;lumber;cars
C) lumber;cars;lumber
D) cars;lumber;cars
Comparative Advantage
The capacity of a being to generate a product or offer a service at a reduced opportunity cost in comparison to another.
Cars
motor vehicles with wheels designed primarily for the transport of people rather than goods.
Lumber
Timber that has undergone transformation into boards and beams, representing an intermediate phase in the creation of wooden materials.
- Ascertain the sources of comparative advantage in foreign trade.
- Employ the theories of opportunity cost and comparative advantage for the analysis of trade interactions between nations.
- Evaluate the merits of countries with diverse production capacities engaging in specialization and trade.
Verified Answer
Learning Objectives
- Ascertain the sources of comparative advantage in foreign trade.
- Employ the theories of opportunity cost and comparative advantage for the analysis of trade interactions between nations.
- Evaluate the merits of countries with diverse production capacities engaging in specialization and trade.
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