Canada produces both lumber and wine.Canada exports lumber and imports wine.The rest of the world imports Canadian lumber and exports wine to Canada.Canada has a comparative advantage in producing _______.The rest of the world has a comparative advantage in producing _______.

Question

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Canada has a comparative advantage in producing lumber because it produces it domestically and can export it to the rest of the world. The rest of the world has a comparative advantage in producing wine because Canada imports wine from other countries rather than producing it domestically.

Canada Produces Both Lumber and Wine