The table below shows units of wheat and cloth produced by each worker per day in both the countries.Table 20.1

-A country benefits from trade if it is able to obtain a good from a foreign country:

Question

The table below shows units of wheat and cloth produced by each worker per day in both the countries.Table 20.1
 
-A country benefits from trade if it is able to obtain a good from a foreign country:

Quizplus · Accepted Answer

According to the theory of comparative advantage, a country should specialize in producing and exporting the good in which its opportunity cost of production is lower than its trading partners. In other words, a country should produce the good for which it has a comparative advantage and import the good for which it has a comparative disadvantage. Therefore, a country benefits from trade if it can obtain a good from a foreign country at a lower opportunity cost than producing it domestically. This means that the country can give up less of other goods to obtain the good from a foreign country than it would have to give up to produce the good domestically. Choice C describes this situation.

The Table Below Shows Units of Wheat and Cloth Produced