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Refer to the information provided in the figure below to answer the question that follows. Which of the following statements is TRUE? U.S. Q Q Canada 800- 800- 600- 600- 400- Ε 400- ☑ 200- 200- 0+ 0+ 0 100 200 300 400 Bushels of soybeans 0 100 200 300 400 Bushels of soybeans A. Only Canada can benefit from trade because the United States has an absolute advantage in the production of both soybeans and alfalfa. B. 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. ○ C. 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. ○ D. 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.

Refer to the information provided in the figure below to answer the question that follows. Which of the following statements is TRUE? U.S. Q Q Canada 800- 800- 600- 600- 400- Ε 400- ☑ 200- 200- 0+ 0+ 0 100 200 300 400 Bushels of soybeans 0 100 200 300 400 Bushels of soybeans A. Only Canada can benefit from trade because the United States has an absolute advantage in the production of both soybeans and alfalfa. B. 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. ○ C. 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. ○ D. 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.

Principles of Macroeconomics (MindTap Course List)
Principles of Macroeconomics (MindTap Course List)
7th Edition
ISBN:9781285165912
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter9: Application: International Trade
Section: Chapter Questions
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Refer to the information provided in the figure below to answer the question that follows. Which of the following statements is TRUE? U.S. Q Q Canada 800- 800- 600- 600- 400- Ε 400- ☑ 200- 200- 0+ 0+ 0 100 200 300 400 Bushels of soybeans 0 100 200 300 400 Bushels of soybeans A. Only Canada can benefit from trade because the United States has an absolute advantage in the production of both soybeans and alfalfa. B. 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. ○ C. 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. ○ D. 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.
Transcribed Image Text:Refer to the information provided in the figure below to answer the question that follows. Which of the following statements is TRUE? U.S. Q Q Canada 800- 800- 600- 600- 400- Ε 400- ☑ 200- 200- 0+ 0+ 0 100 200 300 400 Bushels of soybeans 0 100 200 300 400 Bushels of soybeans A. Only Canada can benefit from trade because the United States has an absolute advantage in the production of both soybeans and alfalfa. B. 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. ○ C. 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. ○ D. 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.
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