Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. When trade opens up, the United States should produce _____ because it has a(n) _____ and should _____.
A) both goods; absolute advantage in both goods; not trade
B) only shoes; comparative advantage at producing shoes; trade for apples.
C) only apples; comparative advantage at producing apples; not trade
D) only apples; comparative advantage at producing apples; trade for shoes.
Correct Answer:
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