Figure 9-1
The figure illustrates the market for wool in Scotland.

-Refer to Figure 9-1.From the figure it is apparent that

Question

Figure 9-1
The figure illustrates the market for wool in Scotland.
 
-Refer to Figure 9-1.From the figure it is apparent that

Quizplus · Accepted Answer

The figure shows that the domestic demand for wool in Scotland is lower than the domestic supply of wool, indicating that Scotland has a comparative advantage in producing wool relative to the rest of the world. This is further supported by the fact that the world price of wool is lower than the domestic price in Scotland, suggesting that other countries can produce wool more efficiently at a lower cost. Therefore, Scotland would benefit from engaging in trade and exporting the excess wool supply.

Figure 9-1 The Figure Illustrates the Market for Wool in Scotland