Home has a comparative advantage in wheat, and Foreign has a comparative advantage in cloth. Once trade occurs, Home produces 1,000 bushels of wheat, and Foreign produces 1,000 yards of cloth. The following table shows the amount of wheat that Home is willing to supply and Foreign is willing to buy at various international prices. In equilibrium, how many bushels of wheat will Foreign import?
A) 900 bushels
B) 700 bushels
C) 500 bushels
D) 300 bushels

Question

Home has a comparative advantage in wheat, and Foreign has a comparative advantage in cloth. Once trade occurs, Home produces 1,000 bushels of wheat, and Foreign produces 1,000 yards of cloth. The following table shows the amount of wheat that Home is willing to supply and Foreign is willing to buy at various international prices.  In equilibrium, how many bushels of wheat will Foreign import?
A) 900 bushels 
B) 700 bushels 
C) 500 bushels 
D) 300 bushels

Quizplus · Accepted Answer

The Answer of Home has a comparative advantage in wheat, and Foreign has a comparative advantage in cloth. Once trade occurs, Home produces 1,000 bushels of wheat, and Foreign produces 1,000 yards of cloth. The following table shows the amount of wheat that Home is willing to supply and Foreign is willing to buy at various international prices.  In equilibrium, how many bushels of wheat will Foreign import?
A) 900 bushels 
B) 700 bushels 
C) 500 bushels 
D) 300 bushels

Home Has a Comparative Advantage in Wheat, and Foreign Has