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

Quizplus · Accepted Answer

Canada exports lumber, indicating that it has a comparative advantage in producing it. The fact that it imports wine suggests that it does not have a comparative advantage in producing it, meaning that the rest of the world likely has a comparative advantage in producing wine.

Canada Produces Both Lumber and Wine