If the ratio of clothing price to food price is 3 to 1 in America and in is 2 to 1 in Europe before trade, then if trade is opened up, America would most likely export food.

Question

Quizplus · Accepted Answer

America has a comparative advantage in food production (lower opportunity cost) compared to Europe, as indicated by the lower ratio of food price to clothing price, making it more likely for America to export food when trade is opened.

If the Ratio of Clothing Price to Food Price Is