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-(Table: Wheat and Aluminium)Use Table: Wheat and Aluminium.The Canada and Germany can produce both wheat and aluminium.The table shows,in tonnage,the maximum annual output combinations of wheat and aluminium that can be produced.Which choice represents a possible trade based on specialization and comparative advantage?
A) Germany would trade 2 tonnes of wheat to the United States for 1 tonne of aluminium.
B) Germany would trade 2 tonnes of aluminium to the United States 0.5 tonne of wheat.
C) The United States would trade 1 tonne of wheat to Germany for 1 tonne of aluminium.
D) The United States would trade 1 tonne of wheat to Germany for 1.5 tonnes of aluminium.

Question

Use the following to answer questions: 
-(Table: Wheat and Aluminium)Use Table: Wheat and Aluminium.The Canada and Germany can produce both wheat and aluminium.The table shows,in tonnage,the maximum annual output combinations of wheat and aluminium that can be produced.Which choice represents a possible trade based on specialization and comparative advantage?
A) Germany would trade 2 tonnes of wheat to the United States for 1 tonne of aluminium. 
B) Germany would trade 2 tonnes of aluminium to the United States 0.5 tonne of wheat. 
C) The United States would trade 1 tonne of wheat to Germany for 1 tonne of aluminium. 
D) The United States would trade 1 tonne of wheat to Germany for 1.5 tonnes of aluminium.

Quizplus · Accepted Answer

The United States should specialize in wheat if it has a comparative advantage in wheat production, while Germany should specialize in aluminium if it has a comparative advantage in aluminium production. The trade should reflect these specializations, with the U.S. trading wheat for more aluminium than it could produce itself, making option D a possible trade.

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