Assume the following conditions: In the United States it takes 4 units of resources to produce a ton of potatoes and 5 to produce a ton of coal.In Canada it takes 6 units of resources to produce a ton of potatoes and 10 to produce a ton of coal.According to the theory of comparative advantage, ________.
A)there would be no basis for trade
B)the United States should import potatoes from Canada and export coal to Canada
C)the United States should export both potatoes and coal to Canada
D)the United States should export potatoes to Canada and import coal from Canada

Question

Quizplus · Accepted Answer

The United States has a comparative advantage in producing coal, while Canada has a comparative advantage in producing potatoes. Therefore, the United States should export coal to Canada and import potatoes from Canada.

Assume the Following Conditions: in the United States It Takes