The opportunity cost of producing one car in Germany is 2, 000 bushels of wheat, and the opportunity cost of producing one car in Canada is 1, 200 bushels of wheat.The two countries can realize mutual gains from trade if they agree on terms of trade that are
A) greater than 2, 000 bushels of wheat per car
B) less than 1, 200 bushels of wheat per car
C) greater than 1, 200 bushels of wheat per car and less than 2, 000 bushels of wheat per car, and Germany produces wheat
D) greater than 1, 200 bushels of wheat per car and less than 2, 000 bushels of wheat per car, and Germany produces cars
E) greater than 1, 200 bushels of wheat per car and less than 2, 000 bushels of wheat per car, and each country produces both goods
Correct Answer:
Verified
Q37: If the United States has an absolute
Q38: If a country has an absolute advantage