If Canada specializes in wheat production and Mexico specializes in the production of radios, then:

Question

Quizplus · Accepted Answer

When Canada specializes in wheat production and Mexico specializes in the production of radios, the relative price of radios in Canada will fall, and the relative price of radios in Mexico will rise. This is because Canada will have a comparative advantage in producing wheat, and Mexico will have a comparative advantage in producing radios. As a result, Canada will export wheat to Mexico, and Mexico will export radios to Canada. This will lead to an increase in the supply of radios in Canada and a decrease in the supply of radios in Mexico, which will cause the price of radios to fall in Canada and rise in Mexico.

If Canada Specializes in Wheat Production and Mexico Specializes in the Production