With no international trade,the U.S.price of wheat is lower than the world price of wheat.This indicates that the United States ________ a comparative advantage in the production of wheat and with international trade,the United States will ________ wheat.

Question

Quizplus · Accepted Answer

The fact that the U.S. price of wheat is lower than the world price of wheat indicates that the United States has a comparative advantage in the production of wheat. Therefore, the United States will export wheat with international trade. Option C (has; import) is incorrect because it implies that the United States has a comparative disadvantage in producing wheat, which is not the case based on the given information. Option B (has; not trade) and Option D (does not have; export) are incorrect because they do not consider the United States' comparative advantage in wheat production. Option E (might have; export) is also incorrect because the information given is sufficient to determine that the United States has a comparative advantage in producing wheat.

With No International Trade,the U