Suppose that Canada can produce 15 units of timber or 3 units of grain.Suppose that Mexico can produce 6 units of timber or 2 units of grain.Which of the following is CORRECT?
A) Mexico has a comparative advantage in grain production.
B) Mexico has an absolute advantage in timber production.
C) Canada has a comparative advantage in grain production.
D) The countries would find trade mutually beneficial at a trading ratio of 1 grain for 2 timber.
Correct Answer:
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