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. When Canada exports lumber to the rest of the world and the rest of the world exports wine to Canada, ________.

Question

Quizplus · Accepted Answer

When Canada exports lumber to the rest of the world and the rest of the world exports wine to Canada, Canada's lumber producers gain because they are able to sell their lumber at a higher price in the rest of the world than they can in Canada. The rest of the world's wine producers also gain because they are able to sell their wine at a higher price in Canada than they can in the rest of the world.

Canada Produces Both Lumber and Wine