If Australia is better than the US at producing wheat, but the US is better than Australia at producing cars, the US should:

Question

Quizplus · Accepted Answer

By selling cars to Australia and buying Australian wheat, both countries can benefit from their respective comparative advantages. This allows for efficient production and trade, leading to overall economic growth and welfare. Imposing a tariff, subsidizing the wheat industry, or putting a quota on Australian wheat could harm the overall trade relationship and potentially lead to retaliation from Australia.

If Australia Is Better Than the US at Producing Wheat