If Australia is better than the US at producing wheat, but the US is better than Australia at producing cars, the US should:

Question

Quizplus · Accepted Answer

By selling cars to Australia and buying Australian wheat, both countries can specialize in producing the goods that they are most efficient at and then trade with each other, leading to overall economic efficiency and gains. Imposing a tariff, subsidizing the wheat industry, or putting a quota on Australian wheat would distort the market and potentially reduce efficiency and global welfare.

If Australia Is Better Than the US at Producing Wheat