(Table) Based on the table

Question

Quizplus · Accepted Answer

Both countries can gain from trade as they have different comparative advantages in production. While Canada has a comparative advantage in producing steel, Mexico has a comparative advantage in producing corn. By specializing in their respective areas of comparative advantage and then trading with each other, both countries can increase their overall economic welfare. Canada can obtain corn at a lower price from Mexico than it can produce domestically, and Mexico can obtain steel from Canada at a lower price than it can produce domestically. As a result, both countries can benefit from the trade between them.

(Table) Based on the Table