Assume that in Canada the opportunity cost of producing one television set is two bushels of wheat. Assume that in the United States the opportunity cost of producing one bushel of wheat is two television sets. If these two countries specialize according to comparative advantage and then trade with each other:
A) Canada will export both televisions and wheat.
B) Canada will export wheat and import televisions.
C) the United States will export wheat and import televisions.
D) the United States will export both televisions and wheat.

Question

Quizplus · Accepted Answer

Canada has a lower opportunity cost for producing wheat, so it will specialize in wheat and export it, while importing televisions from the United States, which has a lower opportunity cost for producing televisions.

Assume That in Canada the Opportunity Cost of Producing One