- Based on the information in Table 35.1,assume China and the United States have the same amount of resources with which to produce soybeans and computers and they produce no other goods.For trade to be mutually beneficial for both countries,the terms of trade will be such that 1 ton of soybeans will exchange for

Question

Quizplus · Accepted Answer

China has a comparative advantage in producing soybeans, while the United States has a comparative advantage in producing computers. Therefore, the terms of trade will be such that China will export soybeans to the United States in exchange for computers. The exact terms of trade will depend on the relative demand for soybeans and computers in each country, but they will be such that both countries benefit from trade.

- Based on the Information in Table 35