In a single year, Germany can raise 100 tons of wheat or produce 1,000 boxes of daisies. In the same growing season, France can raise 50 tons of wheat or produce 750 boxes of daisies. From this information, we know that:

Question

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Germany can raise 100 tons of wheat or produce 1,000 boxes of daisies, whereas France can only raise 50 tons of wheat or produce 750 boxes of daisies. This means that Germany has a comparative advantage in raising wheat because it can produce 1 ton of wheat with the same amount of resources it takes France to produce only 0.5 tons of wheat. Therefore, Germany should specialize in raising wheat and trade with France for daisies since France has a comparative advantage in producing daisies.

In a Single Year, Germany Can Raise 100 Tons of Wheat