Figure 18.1

-Refer to Figure 18.1. After trade begins, ________ will specialize in the production of bicycles and ________ will specialize in the production of hang gliders.

Question

Figure 18.1
 
-Refer to Figure 18.1. After trade begins, ________ will specialize in the production of bicycles and ________ will specialize in the production of hang gliders.

Quizplus · Accepted Answer

According to the figure, the United States can produce either 250 bicycles or 50 hang gliders, while Canada can produce either 100 bicycles or 200 hang gliders. Therefore, the United States will specialize in the production of hang gliders (since it has a comparative advantage in producing hang gliders), and Canada will specialize in the production of bicycles (since it has a comparative advantage in producing bicycles). Therefore, the correct answer is C) Canada; the United States.

Figure 18.1 -Refer to Figure 18.1. After Trade Begins, ________ Will Specialize