If the opportunity cost of manufacturing automobiles is lower in Canada than in Britain and the opportunity cost of manufacturing airplanes is higher in Canada than in Britain,then Canada will:
A) export both airplanes and automobiles to Britain.
B) import both airplanes and automobiles from Britain.
C) export airplanes to Britain and import automobiles from Britain.
D) import airplanes from Britain and export automobiles to Britain.

Question

Quizplus · Accepted Answer

Canada has a comparative advantage in manufacturing automobiles due to its lower opportunity cost, so it will export automobiles to Britain. Conversely, since the opportunity cost of manufacturing airplanes is higher in Canada, it will import airplanes from Britain.

If the Opportunity Cost of Manufacturing Automobiles Is Lower in Canada