Table 31.1.1
Glazeland's Doughnut Market

-Canada produces both lumber and wine. Canada exports lumber and imports wine. The rest of the world imports Canadian lumber and exports wine to Canada. Canada has a comparative advantage in producing ________. The rest of the world has a comparative advantage in producing ________.

Question

Table 31.1.1
Glazeland's Doughnut Market
 
-Canada produces both lumber and wine. Canada exports lumber and imports wine. The rest of the world imports Canadian lumber and exports wine to Canada. Canada has a comparative advantage in producing ________. The rest of the world has a comparative advantage in producing ________.

Quizplus · Accepted Answer

Canada has a comparative advantage in producing lumber because it has abundant natural resources and skilled labor in the forestry industry. The rest of the world has a comparative advantage in producing wine because they have better climate and soil conditions for grape cultivation. Therefore, Canada exports its lumber to the rest of the world, while importing wine from them.

Table 31.1.1 Glazeland's Doughnut Market