Use the following to answer questions :
-(Table: Wheat and Aluminum) Look at the table Wheat and Aluminum. The United States and Germany can produce both wheat and aluminum. The table shows, in tonnage, the maximum annual output combinations of wheat and aluminum that can be produced. Which of the following choices represents a possible trade based upon specialization and comparative advantage?
A)Germany would trade 2 tons of wheat to the United States for 1 ton of aluminum.
B)Germany would trade 2 tons of aluminum to the United States for 0.5 ton of wheat.
C)The United States would trade 1 ton of wheat to Germany for 1 ton of aluminum.
D)The United States would trade 1 ton of wheat to Germany for 1.5 tons of aluminum.

Question

Use the following to answer questions : 
-(Table: Wheat and Aluminum) Look at the table Wheat and Aluminum. The United States and Germany can produce both wheat and aluminum. The table shows, in tonnage, the maximum annual output combinations of wheat and aluminum that can be produced. Which of the following choices represents a possible trade based upon specialization and comparative advantage?
A)Germany would trade 2 tons of wheat to the United States for 1 ton of aluminum. 
B)Germany would trade 2 tons of aluminum to the United States for 0.5 ton of wheat. 
C)The United States would trade 1 ton of wheat to Germany for 1 ton of aluminum. 
D)The United States would trade 1 ton of wheat to Germany for 1.5 tons of aluminum.

Quizplus · Accepted Answer

The United States should specialize in wheat if it has a comparative advantage in wheat production, and Germany should specialize in aluminum if it has a comparative advantage in aluminum production. The trade should reflect these specializations, and option D suggests a trade where the U.S. trades wheat for more aluminum, which aligns with specialization and comparative advantage.

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