$$\begin{array} { | l | c | c | }
\hline & \begin{array} { c }
\text { Wheat } \
\text { (Bushels) }
\end{array} & \begin{array} { c }
\text { Rice } \
\text { (Bushels) }
\end{array} \
\hline \text { India } & 10 & 10 \
\hline \text { Canada } & 40 & 20 \
\hline
\end{array}$$ The accompanying productivity table shows how many bushels of either wheat or rice can be produced in India and Canada with 1 unit of input. To achieve gains from specialization and trade,

Question

$$\begin{array} { | l | c | c | } 
\hline & \begin{array} { c } 
\text { Wheat } \
\text { (Bushels) }
\end{array} & \begin{array} { c } 
\text { Rice } \
\text { (Bushels) }
\end{array} \
\hline \text { India } & 10 & 10 \
\hline \text { Canada } & 40 & 20 \
\hline
\end{array}$$ The accompanying productivity table shows how many bushels of either wheat or rice can be produced in India and Canada with 1 unit of input. To achieve gains from specialization and trade,

Quizplus · Accepted Answer

India has a comparative advantage in producing rice (the opportunity cost of producing rice is lower in India than in Canada), and Canada has a comparative advantage in producing wheat. Therefore, India should specialize in rice and export it to Canada, while importing wheat from Canada to achieve gains from trade.

The Accompanying Productivity Table Shows How Many Bushels of Either